2. Answer the questions. 1) The current stock price for Firm D is $100 while the next dividend is $10. Suppose that the dividend is expected to grow at 10% every year. Figure out the cost of equity for Firm D based on dividend growth model. (30points) 2) Figure out the cost of debt if the bond price for Firm D is $928 for the 5-year bond with a par value of $1,000 and a coupon rate of i 0% paid annually (30points) 3) The tax rate is 50%. Firm D has a Debt-to-Equity ratio (D/E) of 200%.) Figure out the debt-to-firm value (D/V) using Debt-to-Equity ratio (D/E). ii) Figure out the weighted average cost of capital of Firm D (WACC). (40points) 4) Given the following cash flow table, figure out the net present value (NPV) based on the answer to Question 3. If you cannot figure out Question 3, use a WACC of 10%. Do you accept or reject the project? (40points) Projected Cash Flows Year Total Cash Flow 300,000 100,000100,000 100,000 50,000 5) What is the relationship between WACC and capital budgeting? For example, does a higher WACC lead to a higher NPV of a project or does a lower WACC lead to a higher NPV? (30points)