1. calculate the WACC of the firm

2.Explain why capital market data and information is useful when a farm is considering cost of capital

3.Discuss how various factors may affect the cost of capital and cash flow estimates

Table 1: Selected Firm, Industry, and Capital Market Data . . FPC, Inc. issued 10-year $1,000-par bonds five years ago. They carried a coupon rate of 6%. The coupons were paid annually. Currently the bond is selling for $883.40.4 PX The firm's stock price has risen to $21.50 recently. It was $10 when issued. The firm's return on equity (ROE) is 20%, and its dividend payout ratio is 40%. It just paid $1 annual dividend recently. The dividend is expected to grow at a constant rate. Assume the firm is in the 30% (combined) tax bracket. Many specialized consulting firms have a long-term debt to total asset ratio of approximately 40 percent on average. It is considered to be the optimal debt to firm value ratio