Problem 1 ( 75 marks): Atlantic industries has $20,000,000 in bonds outstanding with a coupon rate of 7% paid semiannually and a maturity of 10 years. The bonds are currently selling at a quoted price of 92 . The company also has 35,000 shares of 10% preferred stock outstanding ( $100 par), currently selling for $96 per share. In addition, the company has 1,000,000 common shares outstanding, selling for $45 per share. The firm has a tax rate of 40%, a beta of 2 , an ROE of 15%, and a dividend payout ratio of 40%. The risk-free rate is 2%, and the return on the market portfolio is 10%. a) Calculate the capital structure market value weights, cost of debt, cost of preferred equity, cost of common equity, and WACC. (20 marks)