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Cost of Capital A share of Apple Inc. stock sells for $142.65, and last year's dividend was $0.88. Security analysts are projecting that the common

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Cost of Capital A share of Apple Inc. stock sells for $142.65, and last year's dividend was $0.88. Security analysts are projecting that the common dividend will grow at a constant rate of 7.0% a year. In order to issue new common stock, a flotation cost of 3.5% would be required. Assume that Apple will not use preferred stock in its capital structure. The firm can issue additional long- term debt at an interest rate of 2.51%, and its marginal tax rate is 20%. The market risk premium is 5.5%, the risk-free rate is 0.26%, and Apple's beta is 1.20. The cost of short-term debt for Apple is 0.75% Part 1: Component Costs A) Calculate the after-tax cost of short-term debt (8 points) B) Calculate the after-tax cost of long-term debt (8 points) C) Calculate the cost of preferred stock (8 points) D) Calculate the cost of internal equity using both the CAPM method and the dividend growth approach (8 Points) Part 2: Capital Structure Visit the following website: https://investor.apple.com/investor- relations/sec-filings/ Under the "SEC Groupings" select Quarterly and choose the 10- Q report from July 28, 2021 in PDF format. On page 6, use the 2021 balance sheet values to estimate and identify the capital structure: short-term debt (sum of commercial paper and term debt), long-term debt (Non-current term debt), number of shares outstanding (note that shares are given in thousands and need to multiplied by (1,000/1,000,000) to convert to millions), and common equity (Shares outstanding in millions*stock price). Assume that Apple plans to raise capital according to current book weights for short-term and long-term debt and market weights for common equity, in the future. E) Calculate the capital structure weights (8 points) F) Calculate the weighted average cost of capital (8 points) G) Calculate the cost of new common stock (external equity) (8 points) H) Calculate the weighted average cost of capital for new common stock (8 Points) Note: Make sure to show work in Excel and reference cells in your calculations rather than simply typing in answers. TINC US Copa Last Name Part 1: Comparat AIC Share Alerta de Balara | After Color CAPMA Divid App D DI DIf Pred tech Capital Structure Wall Montagumu Maila the Theme hulmail wa W W. W 1) Weighierara CrofCapital A custom tom del CARE WAT Colofra Stock be Di Ho Wrighted Average Capitaluri A form. Ahoras custom WACC wacka

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