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5. (10 Percent) Assume that you are on the financial staff of Vanderheiden Inc., and you have collected the following data: The yield on the

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5. (10 Percent) Assume that you are on the financial staff of Vanderheiden Inc., and you have collected the following data: The yield on the company's outstanding bonds is 8.0%, its tax rate is 35%, the next expected dividend is $0.70 a share, the dividend is expected to grow at a constant rate of 5.00% a year, the price of the stock is $27.50 per share, the flotation cost for selling new shares is F=8%, and the target capital structure is 30% debt and 70% common equity. What is the firm's WACC, assuming it must issue new stock to finance its capital budget? 6. (10 Percent) Consider the following probability distribution of returns for SeBeta Corporation: Current Stock Price Stock Price in Probability a. What is the expected return for SeBeta Corporation? b. What is the standard deviation of the return on SeBeta Corporation

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