Assume ALFA Company has a bond issue with a ytm of 5% The company has 3,200,000 shares of common stock outstanding with a dividend growth rate of 1.2%. They will issue a 75 cent dividend next week and their beta is 1.2. The T-Bill rate is 2% They have 10,000,000.00 in preferred stock (which is 15% of their equity) with a 7.55% dividend. The companys tax rate is 35%. The capital structure is 60% equity and 40% debt. The market risk premium is 6.5%

What is the companys cost of equity?

A. .0612

C. .0490

E. None of the above

B. .0420

D. .0250

16. What is the companys after tax cost of debt?

A. .05%

C. .02

E. none of the above

B. 5%

D .013

17. What is the Wacc ?

A. .0068

C. .0499

E. none of the above

B. .0698

D. .096

18. This company is:

A. More volatile than the market

D. All of the above

B. Less Volatile than the market

E. None of the above

C. Not enough information to determine