Answer all questions Analyze the cost of capital situations of the following company cases, and answer the specific questions that financeprofessionals need to address.Consider the case of Turnbull Co.Turnbull Co. has a target capital structure of 58% debt,If its current tax rate is 40%, how much higher will6% preferred stock, and 36% common equity. It has aTurnbull's weighted average cost of capital (WACC) be ifbefore-tax cost of debt of 11.1%, and its cost ofit has to raise additional common equity capital bypreferred stock is 12.2%.issuing new common stock instead of raising the fundsthrough retained earnings?If Turnbull can raise all of its equity capital from retained0.90%earnings, its cost of common equity will be 14.7%.0.64%However, if it is necessary to raise new common equity,0.75%it will carry a cost of 16.8%.0.68%Turnbull Co. is considering a project that requires an initial investment of $1,708,000. The firm will raise the$1,708,000 in capital by issuing $750,000 of debt at a before-tax cost of 8.7%, $78,000 of preferred stock at a costof 9.9%, and $880,000 of equity at a cost of 13.2%. The firm faces a tax rate of 40%. What will be the WACC forthis project?Consider the case of Kuhn Co.Kuhn Co. is considering a new project that will require an initial investment of $45 million. It has a target capitalstructure of 45% debt, 4% preferred stock, and 51% common equity. Kuhn has noncallable bonds outstanding thatmature in five years with a face value of $1,000, an annual coupon rate of 10%, and a market price of $1,050.76.The yield on the company's current bonds is a good approximation of the yield on any new bonds that it issues. Thecompany can sell shares of preferred stock that pay an annual dividend of $9 at a price of $92.25 per share. You canassume that Jordan does not incur any flotation costs when issuing debt and preferred stock.Kuhn does not have any retained earnings available to finance this project, so the firm will have to issue newcommon stock to help fund it. Its common stock is currently selling for $22.35 per share, and it is expected to pay adividend of $1.36 at the end of next year. Flotation costs will represent 8% of the funds raised by issuing new Turnbull Co. is considering a project that requires an initial investment of $1,708,000. The firm will raise the$1,708,000 in capital by issuing $750,000 of debt at a before-tax cost of 8.7%, $78,000 of preferred stock at a costof 9.9%, and $880,000 of equity at a cost of 13.2%. The firm faces a tax rate of 40%. What will be the WACC forthis project?Consider the case of Kuhn Co.Kuhn Co. is considering a new project that will require an initial investment of $45 million. It has a target capitalstructure of 45% debt, 4% preferred stock, and 51% common equity. Kuhn has noncallable bonds outstanding thatmature in five years with a face value of $1,000, an annual coupon rate of 10%, and a market price of $1,050.76.The yield on the company's current bonds is a good approximation of the yield on any new bonds that it issues. Thecompany can sell shares of preferred stock that pay an annual dividend of $9 at a price of $92.25 per share. You canassume that Jordan does not incur any flotation costs when issuing debt and preferred stock.Kuhn does not have any retained earnings available to finance this project, so the firm will have to issue newcommon stock to help fund it. Its common stock is currently selling for $22.35 per share, and it is expected to pay adividend of $1.36 at the end of next year. Flotation costs will represent 8% of the funds raised by issuing newcommon stock. The company is projected to grow at a constant rate of 9.2%, and they face a tax rate of 40%.Determine what Kuhn Company's WACC will be for this project.

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Higher the weighted average capital = (Cost new stock - cost of new retained earnings) *…