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ABC Co. has 40% debt and 60% equity, as optimal capital structure. Their stock price is 50$, last dividend distributed was $4.2 , growth rate

ABC Co. has 40% debt and 60% equity, as optimal capital structure. Their stock price is 50$, last dividend distributed was $4.2 , growth rate is expected %5, corporate tax rate is 20% and flotation costs are 5%. They can borrow at 10% rate up to $15 million, above which interest rises to 12%. But if they borrow $25 million or more, interest once again rises to 14%. Their expected net income for next year is $33,6 millions, and 45% will be distributed as dividends. a) Calculate component costs, and break point(s). b)Calculates WACC's. c) What is minimum acceptable return for any project undertake?

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