Zinger Corporation Manufactures Industrial Type Sewing Machines

Zinger Corporation manufactures industrial type sewing machines.Zinger Corp.received a very large order from a few European countries.In order to be able to supply these countries with its products,Zinger will have to expand its facilities.Of the required expansion,Zinger feels it can raise $75 million internally,through retained earnings.The firm's optimum capital structure has been 45% debt,10% preferred stock,and 45% equity.The company will try to maintain this capital structure in financing this expansion plan.Currently Zinger's common stock is traded at a price of $20 per share.Last year's dividend was $1.50 per share.The growth rate has been at 6% and is expected to increase to 8%.The company's preferred stock is selling at $50 and has been yielding 6% in the current market.Flotation costs have been estimated at 8% of common stock and 3% of preferred stock.Zinger Corp.has bonds outstanding at 10%,but its investment dealer has informed the company that interest rates for bonds of equal risk are currently yielding 9%.Zinger's tax rate is 46%.
A)Compute the cost of Kd,Kp,Ke,Kn.
B)Calculate the weighted average cost of capital,assuming no external equity financing.
C)How much can Zinger raise to fund the whole project,while using only internal financing?