Bears WACC Problem You are trying to determine the WACC for Bears, Inc. It has the following characteristics. Discount rate of 10%. The company pays taxes at a 30% rate. Preferred stock trading at a current total value of $150mm with a dividend payment of $3mm per quarter. Accounts payable of $75mm A 10-year senior bond was issued 3 years ago in the amount of $400mm. It is priced at 96 and is callable 8 years after issuance. The coupon rate is 6% paid semi-annually. There is no other debt outstanding. The bond is callable at the end of year 8 (8 years after issuance) at a price of 103. The common stock is priced at $80 per share and pays a dividend of $1 per quarter. Ten years ago, the dividend was $0.50 per share. The ten year treasury rate is 3%. The company's Beta is 1.5 and the market return for equities is 9%. There are 50mm shares authorized, 15mm shares issued, and 5mm shares of treasury stock. What is the cost of equity using the? CAPM approach Gordon Growth Model approach What is the cost of preferred stock? What is the cost of debt? Current yield, YTM, YTC, and YTW? Pre-tax After-tax What is the WACC (use the average of GGM and CAPM approaches)? Winter 2020 DEPAUL UNIVERSITY Driehaus College of Business 21 2/24/2020 Cost of P.S Dividend 34 &valuve- 150.