Church Inc. is presently enjoying relatively for its new product Management expects My enjoying relatively high growth because of a surge in the demand Product Management expects paris and dividends to grow at a rate of 25% for the ne for the next 4 years after which came will probably reduce the growth rate in mings and dividends to zeme Tha i nys tast dividend, DO, WISI 29. tals 1.20, the market risk premium and the risk-free rate is. What is the current price of the common stock? a $26.77 b. $27.89 c. $29.05 d. $30.21 e $31.42 5. Which of the following statements is CORRECT? A change in a company's target capital structure cannot affect its WACC b. WACC calculations should be based on the before tax costs of all the individual capital components c. Flotation costs associated with issuing new common stock normally reduce the WACC d. Ifa company's tax rate increases, then, allelse equal, its weighted average cost of capital will decline e. An increase in the risk-free rate will normally lower the marginal costs of both debt and equity financing 6. Which of the following is NOT a capital component when calculating the weighted average cost of capital (WACC) for use in capital budgeting? a Long-term debt b. Accounts payable c. Retained earnings d. Common stock e. Preferred stock. 7. A company's perpetual preferred stock currently sells for 592.50 per share, and it paysan $800 annual dividend. If the company were to sell a new preferred issue, it would incur flotation cost of 5.00% of the issue price. What is the firm's cost of preferred stock? . 7.8194 b. 8.22% d. 9.10% 9.56% DR 5c Church Inc. is presently enjoying relatively for its new product Management expects My enjoying relatively high growth because of a surge in the demand Product Management expects paris and dividends to grow at a rate of 25% for the ne for the next 4 years after which came will probably reduce the growth rate in mings and dividends to zeme Tha i nys tast dividend, DO, WISI 29. tals 1.20, the market risk premium and the risk-free rate is. What is the current price of the common stock? a $26.77 b. $27.89 c. $29.05 d. $30.21 e $31.42 5. Which of the following statements is CORRECT? A change in a company's target capital structure cannot affect its WACC b. WACC calculations should be based on the before tax costs of all the individual capital components c. Flotation costs associated with issuing new common stock normally reduce the WACC d. Ifa company's tax rate increases, then, allelse equal, its weighted average cost of capital will decline e. An increase in the risk-free rate will normally lower the marginal costs of both debt and equity financing 6. Which of the following is NOT a capital component when calculating the weighted average cost of capital (WACC) for use in capital budgeting? a Long-term debt b. Accounts payable c. Retained earnings d. Common stock e. Preferred stock. 7. A company's perpetual preferred stock currently sells for 592.50 per share, and it paysan $800 annual dividend. If the company were to sell a new preferred issue, it would incur flotation cost of 5.00% of the issue price. What is the firm's cost of preferred stock? . 7.8194 b. 8.22% d. 9.10% 9.56% DR 5c