A company has a "beta" coefficient of 1.16. The 5 year average of a 30 day T-bill rate is 2%. Average market return (S&P 500 index) is 14%.

1. What is the required rate of return?
2. The current dividend for the company is $3.20 per share. The expected growth rate is 7.5% per year. Calculate the present value of the company's stock.
3. WITHOUT using the information of "beta" the current market price for the stock is $28.72 per share. The current stock price is equal to the stock's present value. calculate the required rate of return for the stock if the information in question #2 applies.
4. Using information from question #3, what is the "beta" of the stock now?
5. The company issued 7 million shares of common stock (use stock price in question #3 and dividend in question #2). IT also issued 2 million shares of preferred stock with a $1.29 preferred dividend per share. Currently, the company has $90 million in debts and interest rate of 4.6%. Let's say that the current preferred stock price is $6.72 per share, the corporate tax rate is 30% and the common stock price is that in question #3. What is the (after tax) weighted average cost of capital (after tax) for the company?
6. What is "weighted average cost of capital (after tax)"? Why apply it as the discount rate for expected further cash flows in capital budgeting?