1. Consider the following facts and estimates for LS Corp: Stock Price = $80 Shares outstanding = 50 million Bond price = $800 Bonds outstanding = 12.5 million Bls = 1.50 Treasury security rate = 6% Market yield on comparable quality bond = 10% Expected return on the market portfolio = 12% Expected risk premium of stocks over bonds = 5% Year -7 -6 -5 -4 -3 -2 -1 0 Dividends Per Share for previous years $2.60 $2.70 $2.80 $2.90 $3.10 $3.40 $3.70 $3.92 a. (9) What is the estimated cost of common equity employing the following approaches: (1) dividend growth valuation, (2) CAPM, and (3) bond yield plus expected risk premium? b. (4) One of the estimates from (a) is substantially lower than the other two. Why might this particular estimate be low? c. (4) What is the best estimate of LS's cost of common equity? d. (8) Assume that LS's corporate tax rate is 25 percent, what is of LSs weighted average cost of capital? your estimate