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Consider the following for Scotty Corporation; Po $18.00 Stock price today b 60% Dividend payout ratio g 5.00% Annual dividend growth rate EPS. $3.25 Earnings

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Consider the following for Scotty Corporation; Po $18.00 Stock price today b 60% Dividend payout ratio g 5.00% Annual dividend growth rate EPS. $3.25 Earnings per share 250,000 Annual interest cost TC 30% Corporate tax rate D 3,500,000 Debt E 2,500,000 Equity 1. Calculate the company cost of equity. (1.5 marks) 2. Calculate the company after-tax cost of debt. (1 mark) 3. Calculate the price-earnings ratio. (.5 mark) 4. Calculate the company WACC. (1 mark) 5. Presentation (1 mark) Total 5 Marks

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