7) As a consultant for Zip103, a company with a target capital structure of 40% debt, 15% preferred stock, and 45% common equity, you need to determine the company's

weighted average cost of capital (WACC). Assuming the after-tax cost of debt is 6.00%, the cost of preferred stock is 7.50%, and the cost of retained earnings is 12.75%, and the company is not planning to issue any new shares, what is the WACC for Zip103?

8) Assuming Amazon Inc. has just paid a dividend of $0.75 per share (D0), and its dividend is expected to increase at a constant rate of 6.50% per year. What is the current stock price of the company, given that the company has a beta of 1.25, the

market's required return is 10.50%, and the risk-free rate is 4.50%, we can use the dividend discount model to estimate the stock price.