Question: TRM Consulting Services currently has the following capital structure Source Book Value Quantity Common Capital 5 6,500,000 350,000 Preferred Capital 5 375,000 7,500 Deuda $

TRM Consulting Services currently has the
TRM Consulting Services currently has the following capital structure Source "Book Value" Quantity Common Capital 5 6,500,000 350,000 Preferred Capital 5 375,000 7,500 Deuda $ 4,000,000 4,000 The debt is represented by obligations with an original maturity of 15 years, issued five years ago, with a coupon rate of 8% and currently sold for $ 965. The bonds pay interest every six months. The preferred capital pays a dividend of S 5 per year and is currently valued at S 60 per share. Float costs on debt and preferred equity are negligible and can be overlooked, but will be 8% of the common equity sales price. The common stock, which can be purchased for $ 32.00, has seen a 5% annual growth rate in dividends and is expected to pay a $ 1.50 dividend the following year. Additionally, the company expects to have 5 150,000 of retained earnings. Assume that the TRM marginal tax rate is 35%. a. Create a worksheet with all the data for the problem in a well-organized entry area. b. Calculate the book value weights for each source of capital. c. Calculate the market value weights for each source of capital d. Calculate the cost of capital components (that is, debt, preferred equity, retained earnings, and new common equity). e. Calculate the weighted average costs of capital using the market value and book value weights

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