1. Suppose Boyson Corporation's projected free cash flow for next year is $200,000, and FCF is expected to grow at a constant rate of 6.5%. If the company's weighted average cost of capital is 11.5% and the required return on equity is 14.5%, what is the firm's total corporate value? The firm's total corporate value = 66666.67 2. Golden Knights Co. is considering a new project. The project has a target capital structure of 30% debt, 15% preferred stock, and 55% common equity. Golden Knights Co. has noncallable semi-annual bonds outstanding that mature in nine years with a face value of $1,000, coupon rate of 11%, and a market price of $1,100. The yield on the company's current bonds is a good approximation of the yield on any new bonds is a good approximation of the yield on any new bonds that it issues. The company can sell shares of preferred stock that pays an annual dividend of $5 at a price of $80 per share. Golden Knights Co. does not have any retained earnings available to finance this project, so the firm will have to issue new common stock to help fund it. Its common stock is currently selling for $49 per share, and it is expected to pay a dividend of $1.8 at the end of next year. Flotation costs will represent 6% of the funds raised by issuing new common stock. The company is projected to grow at a constant rate of 8%. Golden Knights Co. faces a tax rate of 40%. a. What is the before-tax cost of debt? N= 1000 PMT= 1100 FV= 1100 PV= 1100 CPT i= 11 % b. What is the cost of preferred stock? Cost of preferred stock = 15 %