Estimating Weighted Average Cost of Capital

Assume that a company has $1 billion in preferred stock and $3 billion in common stock. Also, it pays 6% dividends on preferred stock and its cost of equity capital is 7%. The company has no debt. Compute the company's WACC.

Round answers to two decimal places (ex: 0.02345 = 2.35%)

Estimating Company Value Using DDM with Constant Perpetuity

Assume that a company's dividends per share are projected to remain at $1.20 each year, and that its cost of equity capital is 5%. Estimate the company's per share stock price.

Round your answer to the nearest dollar.