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1 . Phillips Company will pay a dividend of 2 . 6 0 TL next year. Dividends will grow at a constant annual rate of

1. Phillips Company will pay a dividend of 2.60 TL next year. Dividends will grow at a constant annual rate of 8%. The price of the shares is 20 TL. The cost of issuing shares is 15% of the issue price. If the corporate tax rate is 35%, calculate the cost of retained earnings and the cost of new equity.
2. Baxter Company's target capital structure consists of 30% debt, 15% preferred stock, and 55% equity. The after-tax cost of debt is 7%, the cost of preferred stock is 11%, the cost of retained earnings is 15%, and the cost of new equity is 16%. If the company's beta is 1.5 and the tax rate is 35%, and only retained earnings will be used in equity, calculate the weighted average cost of capital (WACC).
3. Calculate the weighted average cost of capital (WACC) for S&G Company. The corporate tax rate is 40%.
o Capital Structure Weight Pre-Tax Cost
o Bonds 40%7.5%
o Preferred Stock 5%11%
o Common Stock 55%15%
4. B. Company's capital structure consists of 70% debt and 30% equity. The pre-tax cost of debt is 12%, and the tax rate is 30%. The company will pay a dividend of 2 TL at the end of the first year (D1). Dividends will grow by 5% each year. The stock price is 10 TL. The cost of issuing shares is 2 TL per share. The company's equity will consist entirely of new shares. Calculate the cost of equity. Calculate the weighted average cost of capital (WACC).

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