1)

A firm can issue perpetual preferred stock for $44.10 that would pay a constant annual dividend of $4.60. What is the firm's cost of preferred stock?

Answer in percentage without the symbol

Question 2 (1 point)

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A firm is expected to pay a $2.05 dividend. The stock is currently selling for 43.50 and is expected to grow at a rate of 5%. What is the cost of retained earnings for this firm?

Answer in percentage without the symbol

Question 3 (1 point)

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A firm has a beta of 1.0. The market is expected to yield 7.9% and the risk free rate is 2%. What is the cost of retained earnings for this firm?

Answer in percentage without the symbol

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Question 4 (1 point)

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A stock that just paid a $2.30 dividend. Dividends have been growing at a 4% rate and the stock is currently selling for $45.00. What is the cost of retained earnings of this firm?

answer in percent without symbol.

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Question 5 (1 point)

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A firm has a target capital structure that consists of 60% of retained earnings and the rest in debt. The firm's cost of retained earnings is8.3%. The firm's cost of new debt is similar to the yield to maturity of its existing bonds, which is 6.1%. The firm's tax rate is 25%. Given this information, and given that the firm has no preferred stock, what is the WACC?

Answer in percentage without the symbol.

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Question 6 (1 point)

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A firm is expected to pay a $2.15 dividend. The stock is currently selling for 65.85 and is expected to grow at a rate of 5%. What is the cost of new equity if floatation costs are 10%?

Answer in percentage without the symbol

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