Bus 2292 Homework Unit 3 Name Staple this page and next together when handing in please. WACC Gopher It Co. Limited wishes to estimate its weighted average cost of capital. The following financial data has been provided BALANCE SHEET (in thousands) December 31, 2022 Total Assets $19,500 2000 Accounts Payable $ 2400 Notes Payable 2600 Bonds (1,000 par) 5600 Preferred Stock (10,000 sh.) 4200 Common Stock (1,000,000 shares) Retained Earnings 2700 Total Liab. & Equity $19,500 Additional Information: Common Stock Debt 2013 cash dividend - 25 Bond Term to maturity - 20 yrs. Assume constant growth Bond Coupon or Contract Rate -8% of dividends Bond Market Price - $870 (par S1000) 2019 cash dividend - 40 Short-term debt rate -7% Current Price $3.40 Assume there are 5600 bonds Beta-1.50 Preferred Stock Market Data Dividend -51.00 Rf-3% Current Price - $10. Rm 6% Tax Rate -35% 1. Determine the after-tax percentage cost of short-term debt (Acct. Pay. & Notes Pay.). 2. Determine the after-tax percentage cost of long-term debt (bonds). 3. Determine the percentage cost of preferred stock. 4. What is the approximate average growth rate of the dividenda? 5. Using the dividend valuation approach estimate the percentage cost of common cquity. 6. Using the CAPM approach, estimate the percentage cost of common equity. 7. What is the market value of the Bands? 8. What is the market value of the Preferred Shares? 9. For common equity, take as your estimate, the average of the two above approaches (Q#5 & Q46) in computing WACC. Determine the W.A.C.C