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2. Answer the questions. 1) The current stock price for Firm ( mathbf{E} ) is ( $ 100 ) while the next dividend is (

image text in transcribed 2. Answer the questions. 1) The current stock price for Firm \\( \\mathbf{E} \\) is \\( \\$ 100 \\) while the next dividend is \\( \\$ 5 \\). Suppose that the dividend is expected to grow at \7 every year. Figure out the cost of equity for Firm E based on Dividend growth model. (30points) 2) Figure out the cost of debt if the bond price for Firm \\( \\mathbf{E} \\) is \\( \\$ 920 \\) for the 5-year bond with a par value of \\( \\$ 1,000 \\) and a coupon rate of \6 paid semiannually. (30points) 3) Firm \\( \\mathbf{E} \\) has a Debt-to-Equity ratio (D/E) of \50. Figure out the debt-to-firm value (D/V) using the Debt-to-Equity ratio (D/E). (30points) 4) Figure out the weighted average cost of capital (WACC) of Firm E when the tax rate is \50. (30points)

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