Financial Management Chapter 9-Cost of Capital 1.The Sun Company's current capital structure consists of AED 200 million of long term debt and AED700 million of equity. The company can sell long-term bonds at a market yield of 8 percent. The required return on its common stock is 12 percent. The rm's marginal tax rate is 30 percent. What is its weighted average cost of capital (WACC). 2. Compute R1: and Rn under the following circumstances: a. D1 = $4.60, P0 = $60, g = 6%, F = $3.00. I). E1 (earnings at the end of period one) = $6, payout ratio equals 30 percent, P9 = $24, g = 4.5%, F = $1.60. 0. Do (dividend at the beginning of the rst period) = $3, growth rate for dividends and earnings (g) = 8%, P0 = $50, F = $3. 3.SMT Company has a new project that will require funding of AED 15 million. The company has decided to pursue an all-debt scenario. The SMT's Director has made an agreement with four lenders for the needed nancing. These lenders will advance the following amounts and interest rates: Itettt Rate 8% 10% 9% 7% 4.Use the constant-growth dividend valuation models where appropriate to ll in the missing values. Current Dividend Expected Dividend Investor-Required Market Price per Share Growth Return % Per Share _ 2% 16 18.21 6.00 _ 13 78.75 4.80 3% 41.2 What is the weighted average cost of capital for the AED 15 million? 5.The Moon Corporation, has an after tax cost of debt of 6 percent. With a tax rate of 35 percent, what can you assume the yield on the debt is