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3 (Total 25 points) A firm has determined its optimal capital structure which is composed of the following sources and target market value proportions. Question 3c) (5 points): Please calculate the firm's cost of preferred stock up to two decimals. Show your calculations. Answer to question 3c): Target market proportions 20% Sources of Capital Long-term Debt Preferred stock Common stock equity 10 70 Debt: The firm can sell a 12-year, $1,000 par value, 7 percent bond for $960. A flotation cost of 2 percent of the face value would be required in addition to the discount of $40. Preferred Stock: The firm has determined it can issue preferred stock at $75 per share par value. The stock will pay a $10 annual dividend. The cost of issuing and selling the stock is $3 per share. Question 3d) (5 points): Please calculate the firm's cost of a new issue of common stock up to two decimals. Show your calculations. Common Stock: A firm's common stock is currently selling for $18 per share. The dividend paid last year was $1.74. Its dividend payments have been growing at a constant rate of 5%. Answer to question 3d): Additionally, the firm's marginal tax rate is 40 percent. Question 3a) (5 points): Please calculate the firm's before-tax cost of debt up to two decimals. Show your calculations. Answer to question 3a): Question 3e) (5 points): Please calculate the firm's weighted average cost of capital up to two decimals using your answers of questions 4a to 4d. In case you don't have an answer(s) to any of the aforementioned questions, please apply: Cd = 5%; p = 14.5% and CS = 16% Show your calculations. Answer to question 3e): Question 3b) (5 points): Calculate the cost of debt after taxes up to two decimals. Show your calculations. Answer to question 3b)