A company has an optimal capital structure of 35% debt
financing, 15% preferred stock financing, 50%
common equity financing. The tax
rate is 25%, the preferred stock dividend is $2 per share, next
period’s
common stock dividend is $1 per
share and is expected to grow by 5% in future years, the price of
the
company’s common stock is $10,
the price of the company’s preferred stock is $25, the bond coupon
rate
is 4%. Assume that retained
earnings is...