E$9-3$ Belle Fashions supplies garments to high street retailers. They have been paying

dividends steadily for $10$ years. During that time, dividends have grown at a compound

annual rate of $5\%.$ If Belle Fashions's current stock price is $5\mathrm{.}80$ and the firm plans to

pay a dividend of $0\mathrm{.}70$ next year, what is the required return on Belle's common stock?

E$9-4$ Garba Exports Ltd$.$ is a manufacturer of cotton yarn. It has $40\%$ debt and $60\%$

equity in its capital structure. The firm's estimated after$-$tax cost of debt is $7\%$ and

its estimated cost of equity is $12\%.$ Determine the firm's weighted average cost of

capital $($WACC$).$

E$9-5$ Vaso Tools Gmbh uses debt, preferred stock, and common stock to raise capital.

The firm's capital structure targets the following proportions: debt, $55\%$; preferred

stock, $20\%$; and common stock, $25\%.$ If the cost of debt is $8\%,$ preferred stock

costs $11\%,$ and common stock costs $14\%,$ what is Vaso's weighted average cost of

capital $($WACC$)?$