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The current capital structure of stewart-line corporation is asfollows:Bonds (7 %, $1000 par 15years) $75,000Preferred stock ($100 par, 7.25%dividend) $1,000,000Common stock:Par value ($2.50par) $500,000Retainedearnings $350,000 $850,000Total $ 2,600,000Other information about Stewart-line corporation:The market price is $975 for the bonds, $60 for the preferredstock, and $21 for common stock. Flotation costs are 9% for bondsand 5% for preferred stock. The firm’s tax rate is 46%. Commonstock will pay a $2.80 dividend which is not expected to grow.a. Calculate the weighted cost of capital using only internalcommon equityb. Why do we need to determine the firm’s overall weighted costof capital and not just the individual component cost ofcapital?