2. WACC . Dividend Growth, and CAPM A firm's pre-tax cost of debt is 6% and the firm faces a tax rate of 21%. The firm's financial policy requires the use of 25% debt financing, 50% common equity financing, and 25% preferred equity financing. 1. What is the firm's cost of preferred equity, if the firm pays a dividend of $5.50 and preferred stock currently trades at a price of $60 ? 2. What is the firm's cost of common equity, , if the firm pays will pay a dividend of $1.25 at the end of the year, the dividend growth rate is 3.67%, and the stock currently trades at a price of $15 ? 3. What is the firm's WACC using the dividend growth model to find the cost of common equity? 4. What is the firm's cost of common equity, if the firm's Beta is 0.80 , the risk-free rate, , is 3%, and the return on the market, , is 16% ? 5. What is the firm's WACC using the CAPM to find the cost of common equity? 2. WACC . Dividend Growth, and CAPM A firm's pre-tax cost of debt is 6% and the firm faces a tax rate of 21%. The firm's financial policy requires the use of 25% debt financing, 50% common equity financing, and 25% preferred equity financing. 1. What is the firm's cost of preferred equity, if the firm pays a dividend of $5.50 and preferred stock currently trades at a price of $60 ? 2. What is the firm's cost of common equity, , if the firm pays will pay a dividend of $1.25 at the end of the year, the dividend growth rate is 3.67%, and the stock currently trades at a price of $15 ? 3. What is the firm's WACC using the dividend growth model to find the cost of common equity? 4. What is the firm's cost of common equity, if the firm's Beta is 0.80 , the risk-free rate, , is 3%, and the return on the market, , is 16% ? 5. What is the firm's WACC using the CAPM to find the cost of common equity