9) On January 1, the total market value of the Hoppenmeimer Company was $20 million. During the year, the company plans to raise and invest $10 million in new projects. The firm's present market value capital structure, shown below, is considered to be optimal. Assume there is no short-term debt. Debt $10,000,000 Common Equity 10,000,000 Total Capital $20,000,000 New 30-year bonds will have a 7% stated rate, are discounted $59.36 for each $1,000 par value bond when issued, and pay interest semi-annually. Stockholder's required rate of return is consists of a 5% dividend yield to the investor based on the next dividend paid out of $1.25 a share, and an expected constant growth rate of 8%. Flotation costs to the issuer are $2 a share. The marginal corporate tax rate is 40%. a. To maintain the present capital structure, how much of the new investment (in millions) must be financed by common equity. b. What is the net price per share to the company if they use external equity and issue stock to finance the business? How many new shares must be issued? Now assume that there is sufficient cash flow so that Hoppenmeimer can maintain its target capital structure without issuing additional shares of equity. What is the WACC? C