Torch Industries can issue perpetual preferred stock at a price of $53.50 a share. The stock would pay a constant annual dividend of $5.00 a share. What is the company's cost of preferred stock, rp? Round your answer to two decimal places. % Pearson Motors has a target capital structure of 45% debt and 55% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 10%, and its tax rate is 40%. Pearson's CFO estimates that the company's WACC is 13.40%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. Palencia Paints Corporation has a target capital structure of 35% debt and 65% common equity, with no preferred stock. Its before-tax cost of debt is 13%, and its marginal tax rate is 40%. The current stock price is P0 = $34.50. The last dividend was D0 = $4.00, and it is expected to grow at a 4% constant rate. What is its cost of common equity and its WACC? Round your answers to two decimal places. Do not round your intermediate calculations. Olsen Outfitters Inc. believes that its optimal capital structure consists of 50% common equity and 50% debt, and its tax rate is 40%. Olsen must raise additional capital to fund its upcoming expansion. The firm will have $1 million of retained earnings with a cost of rs = 13%. New common stock in an amount up to $7 million would have a cost of re = 17%. Furthermore, Olsen can raise up to $3 million of debt at an interest rate of rd = 9% and an additional $4 million of debt at rd = 11%. The CFO estimates that a proposed expansion would require an investment of $3.1 million. What is the WACC for the last dollar raised to complete the expansion? Round your answer to two decimal places. rs = % WACC = % Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at rd = 10%, and its common stock currently pays a $3.50 dividend per share (D0 = $3.50). The stock's price is currently $28.75, its dividend is expected to grow at a constant rate of 9% per year, its tax rate is 40%, and its WACC is 13.05%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your answer to two decimal places.