16. Numerical cost of capital problem I A firm has equity $2 million and risk-free debt $2 million. The cost of equity is 12% and the risk-free rate 4%. (a) What is the firms weighted average cost of capital? (b) If income is a perpetuity, what is expected net operating income per year? (c) How much interest does the firm pay? (d) What is expected net income per year? (e) If there are 200,000 shares outstanding and the firm retains 50% of its earnings, what is the dividend per share?