stock has a per share par value of $25

b.   
Micro Advantage, Inc., has $5,000,000 preferred stock outstanding
that it sold for $24 per share. The preferred stock has a per share
par value of $25 and pays a $3 dividend per year. The current market
price is $30 per share. The firm’s tax bracket is 30 percent. What
is the after-tax cost of the preferred stock?

c.   
In addition to the bonds and preferred stocks described in (a) and
(b) above, Micro Advantage has outstanding 50,000 shares of common
stock that has a par value of $10 per share and a cur- rent market
price of $170 per share. The expected after-tax market return on the
firm’s common equity is 20 percent. What is Micro Advantage’s
weighted-average cost of capital (WACC)?

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