6G

Garden Tools Inc. has bonds, preferred stock, and common stocks outstanding. The number of securities outstanding, the current market price, and the required rate of return for these securities are stated in the table below. The firms tax rate is 35%.

Calculate the firm's WACC adjusted for taxes using the market information in the table.

Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box)

	The Number of Securities Outstanding	Selling price	The Required Rate of Return
Bonds	1,867	$1,226	11.36%
Preferred Stocks	4,713	$52.40	16.47%
Common Stocks	1,841	$72.18	12.36%

Your Answer:

6A

Question 3 (1 point) The Black Bear Company just paid an annual dividend of $5.98. If you expect a constant growth rate of 8% percent, and have a required rate of return of 12.65 percent, what is the current stock price according to the constant growth dividend model (Gordon model)? Round the answers to two decimal places. All the work has to be shown! Find the Payback period for the following project: Project X Initial Outlay $8,990 Year 1 $3,220 Year 2 $3,960 Year 3 $3,540 Year 4 $7,950 The answer should be calculated to two decimal places