Assignment: Module 5 Homework Assignment Score: 70.00\% Questions Problem 10.15 (WACC and Cost of Common Equity) Question 10 of 20 \begin{tabular}{ll} \hline 8. & 0 \\ \hline 9. & \\ 11. & 0 \\ \hline 12. & 0 \\ 13. & 0 \\ 14. & 0 \\ 15. & 0 \\ \hline 16. & 0 \\ \hline 17. & 0 \\ \hline 18. & \\ \hline 19. & \end{tabular} Kahn Inc. has a target capital structure of 60% common equity and 40% debt to fund its $8 billion in operating assets. Furthermore, Kahn Inc. has a wacc of 16%, a before-tax cost of debt of 8%, and a tax rate of 25%. The company's retained earnings are adequate to provide the common equity portion of its capital budget. Its expected dividend next year (D1) is $2, and the current stock price is $26. a. What is the company's expected growth rate? Do not round intermediate calculations. Round your answer to two decimal places. % b. If the firm's net income is expected to be $1.0 billion, what portion of its net income is the firm expected to pay out as dividends? Do not round intermediate calculations. Round your answer to two decimal places. (Hint: Refer to Equation below.) Growth rate =(1 Payout ratio ) ROE %