USe the forecasting variables below to complete the Weighted Average cost of capital WACC at different break points. use the same WACC that you calculated on this sheet for all years and we are using the highest time. Preferred stock is issued but some is not yet outstanding (so no flotation preferred)

WACC facts Given Barking Do Corp Cost of Capital Optimal Capital Structure 25% Debt 10% Preferred Equity 65% Common Equity Net Income for the coming var $4,000,000 Use Retained Earnings for common equity until completely exhausted for that year (don't spend previous year's RE) Dividends policy is to distribute 60% of annual Nias dividends Current RE are 0 30% Tax rate Borrowing Limits and Interest Rates Amount Forrowed Interest Rate Oto $400,000 B% over $400,000 12 Common Stock price $60 Preferred Stock price $36 D. $5 for the coming year D SA for the coming year E 7 Float Component costs of capital Alter-tax cost of debt, ATR (1) Alter-tax cost of debt, Atk 121 Cost of Preferred Stock, Cost of existing equity (RE), Cost of new equity, per ATT kd(1-TR) up to $400,000 borrowed per AT Tkd 1-TR) if over $400,000 borrowed per the dividend growth model per the dividend growth model and CAPM per the dividend growth model and CAPM b. MCC break points: Debt break point based on 25% debt financing Equity break point Net Income Dividends RE available based on 65% common equity finanore Breakpoint c. Mcc figures, using higher rates for equity and debt when past break point: WACC up to 1st break point Marl CC between 1st & 2nd break points Margral CC after 2nd breakpoint Uses higher costs of debit Uses higher costs of capital WACC facts Given Barking Do Corp Cost of Capital Optimal Capital Structure 25% Debt 10% Preferred Equity 65% Common Equity Net Income for the coming var $4,000,000 Use Retained Earnings for common equity until completely exhausted for that year (don't spend previous year's RE) Dividends policy is to distribute 60% of annual Nias dividends Current RE are 0 30% Tax rate Borrowing Limits and Interest Rates Amount Forrowed Interest Rate Oto $400,000 B% over $400,000 12 Common Stock price $60 Preferred Stock price $36 D. $5 for the coming year D SA for the coming year E 7 Float Component costs of capital Alter-tax cost of debt, ATR (1) Alter-tax cost of debt, Atk 121 Cost of Preferred Stock, Cost of existing equity (RE), Cost of new equity, per ATT kd(1-TR) up to $400,000 borrowed per AT Tkd 1-TR) if over $400,000 borrowed per the dividend growth model per the dividend growth model and CAPM per the dividend growth model and CAPM b. MCC break points: Debt break point based on 25% debt financing Equity break point Net Income Dividends RE available based on 65% common equity finanore Breakpoint c. Mcc figures, using higher rates for equity and debt when past break point: WACC up to 1st break point Marl CC between 1st & 2nd break points Margral CC after 2nd breakpoint Uses higher costs of debit Uses higher costs of capital