unit 6 question 20 Barton Industries expects that its target capital structure for raising funds in the future for its c

[answerhappygod]

unit 6 question 20
Barton Industries expects that its target capital structure for
raising funds in the future for its capital budget will consist of
40% debt, 5% preferred stock, and 55% common equity. Note that the
firm's marginal tax rate is 25%. Assume that the firm's cost of
debt, rd, is 10.4%, the firm's cost of preferred stock,
rp, is 9.6% and the firm's cost of equity is 13.0% for
old equity, rs, and 13.3% for new equity, re.
What is the firm's weighted average cost of capital
(WACC1) if it uses retained earnings as its source of
common equity? Do not round intermediate calculations. Round your
answer to two decimal places.
%
What is the firm’s weighted average cost of capital
(WACC2) if it has to issue new common stock? Do not
round intermediate calculations. Round your answer to two decimal
places.
%