Given the following information, calculate the weighted average cost of capital for Puppet Corporation. (Round intermediate calculations to 2 decimal...

Given the following information, calculate the weighted average cost of capital for Puppet Corporation. (Round intermediate calculations to2 decimal places. Round thefinal answers to2 decimal places.)

    Percent of capital structure:     

Debt55%    

Preferred stock 5 %       

Common equity 40 %      

Additional information:     

Bond coupon rate 8.5%     

Bond yield 7%     

Bond flotation cost 2%     

Dividend, expected common $1.50       

Price, common$30.00      

Dividend, preferred 5%     

 Flotation cost, preferred 3%    

 Flotation cost, common 4%     

Corporate growth rate 6%      

Corporate tax rate 35%  

a.Calculate the cost of capital assuming use of internally generated funds.

b.Calculate the cost of capital assuming use of externally generated funds.