Question
1- Your firm's debt to equity ratio (D/E) is 1.19 and the cost of the equity is 14.70% and the cost of the debt is
1- Your firm's debt to equity ratio (D/E) is 1.19 and the cost of the equity is 14.70% and the cost of the debt is 3.30%. Given that the tax rate is 17.00%, what is your firm's weighted average cost of capital (WACC)? (enter your value as a percent (i.e. 20.5 for 20.5%) tolerance is 0.1)
2- A stock has a \beta of 1.2, and the expected market return this year is 10.09%, and the current risk-free rate is 3.73%. The firm just recently released a dividend for $0.86 per share, and it expects that dividends will continue to grow at the sustainable growth rate for the future. Given that firm equity was $207,500.00 last year, and that the firm had Net Income of $40,813.24 and dividends were $27,753.00. What is the price per share of the stock? (tolerance is 0.1, round to 2 decimals, do not enter $ symbol)
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