4. (18 points) Company QWERTY has 5 million of preferred stocks outstanding. Each stock is traded at $50 and pays annual dividend of $5. It also has two bond issues outstanding. Bond A matures in 8 years, has face value of $1,000 and coupon rate of 10% (coupons are paid annually). Current market price of bond A is $900. Bond B is a zero-coupon bond, with face value of $10,000. It matures in 3 years and is currently traded at 80% of par. There are 100,000 bonds of type A and 20,000 bonds of type B issued. Tax rate is 20%. (a) (14 points) Suppose that QWERTY also has 10 million of common shares outstanding, traded at $70 per share. Market beta of those shares is 1.6. Market risk premium is 6%, while risk-free rate is 4%. Compute WACC of QWERTY. (b) (4 points) Suppose, additionally, that the dividends on the common shares are growing at a constant rate. The most recent dividend per share was $4. What is the dividend growth rate consistent with the cost of common equity from part (a)