QUESTION 4
PIE Corporation has 8.75 million shares of common stock outstanding, 215,000 shares of RM6 annual dividend preferred stock outstanding, and 105,000 of 7.5% semi-annual bond outstanding.

The common stock currently sells for RM34 per share and has a beta of 1.5, the preferred stock currently sells for RM91 per share, and the bonds have 15 years to maturity and sell for 93% of par. The market risk premium is 8.5%, T-bills are yielding 5%, and the corporate tax rate is 35%. Calculate the following:

1. Firm’s market value capital structure.
2. Cost of equity.
3. Cost of preferred stock.
4. Cost of debt.
5. Weighted Average Cost of Capital (WACC).