1.Assume that A limited paid a dividend of21 cents per share just recently. The shares currently sell for $10.2. You also estimate that the dividend will grow steadily at 2.7 % per year into the indefinite future. What is the cost of capital, kefor A limited? Answer as a percentage accurate to two decimal places (11.32% should be entered as 11.32).Do not enter the % sign.

2.Polycorp has a debt equity ratio of 0.53.What is the correct debt ratio D/V that should be used in the WACC formula?

WACC = ke x E/V+ kd x (1-t) x D/V

Provide an answer as a decimal accurate totwo decimal places eg 60.156% should be entered as .60

Do not enter the % sign.

Question 3

The next dividend for ABC Limited will be $0.6 per share (D₁). Investors require a 12 % return on companies such as ABC Limited. ABC's dividend increases by 5 % every year. Based on the dividend growth model what is the value of ABC Limited shares today? Price to the nearest cent.Do not enter the $ sign.

Question 4

What is the cost of capital for bank overdraft (k_bo). The overdraft rate is7.9 % pa compounded 12 times a year? Answer as a percentage to two decimal places (2.12% should be entered as 2.14).Do not enter the % sign.

Question 5

A company has annual net operatingcash flow(X) of 1.8 million dollarsin perpetuity and the market value of its capital (V) is10.7 million dollars. What is the company's cost of capital k_o? Provide your answer as a percentage to two decimal places.Do not enter the % sign.

Question 6

Calculate the cost of equity capital using CAPM if the risk-free rate of interest is 4 per cent, the return on the market portfolio is 9 per cent, the beta of the firm's assets is .8 and the and beta of equityis 1.2. Provide your answer as a percentage to two decimal places (15.32% should be entered as 15.32).Do not enter the % sign.

Question 7

The 90 day bank bill rate is quoted as 3.9 in the financial press. What is the correct cost of capital k_bbto be used in the WACC calculation. Express as a number accurate to four places (to the nearest basis point).Do not enter the % sign (eg 5.5671% should be entered as .0557).

Question 8

Calculate the cost of preference capital (k_p) for a non-redeemable preference share which has the following:

Price = $16 and a Preference dividend of $1.8paid every six months. Your answer should the effective annual cost as adecimal accurate tofour decimal places.For example an answer of 12.113% should be entered as .1211 with no % sign.

Question 9

XYZ Corporation has just paid a dividend of57 cents per share.The current market price of the share is $16 and shareholders require a return of 9 % pa.What is the annual growth rate (g) of the dividends?Answer as a percentage accurate to two decimal places.Do not enter the % sign.