Company A common stock 1,800,000 shares, B= 1.5. Company A just paid a dividend of $.80, with expected dividends growth at 5% per year. The ERM is 12%, and TB =yielding 3.5%. The most recent stock price for Company A is $61.

B= beta, ERM = expected return on market, TB = Treasury Bills

Company A has 40,000 semi-annual-coupon bonds with CR= 7%, PV= $1000, CPQ=119.80%; the bonds have 25 years to maturity.

It also has 100,000 shares of 4% dividend preferred stock with a current price of $78, and a PV= $100.

CR = Coupon Rate PV = par value, CPQ= current price quote

Ignore all floatation costs. The tax rate is 40%.

Calculate the cost of equity using the DCF method.

Calculate the cost of equity using the CAPM method.

Calculate the before-tax cost of debt.

Calculate the cost of preferred stock.

What are the percentages of total value of Floyd in equity, debt and preferred stock?

What is Company As WACC, assuming cost of equity as average of (a) and (b)?