Formulas?

The Solar Utility Company has projected a capital budget of $5 million for 2011. The capital structure (based upon market values) is 30 percent debt and 70 percent common equity. Management believes this structure to be optimal. Solar Utility has a combined federal/state/local tax rate of40%. The following information has been collected about Solar Utility's securities. 41. Debt: The new debt to be issued is forecast to have a yield to maturity (i.e., before-tax cost of debt) of 9.03%. Common stock: Market price $44, very recently paid dividend $2, expected growth rate 10 percent. Flotation cost for a new stock issue would run about 8 percent. However, Solar Ultility has adequate retained earnings. No external equity will be used in the near future. Compute Solar Utility's weighted average cost of capital (kwAcc 42. Cream of Tomato Company has the following data available. Net income available to common stockholders Sales - $2.5 million $250,000 Total asset turnover 3 fcommon equity to total assets = 0.4 Note that this ratio is sometimes called the equity ratio. Cream of Tomato does not have any preferred stock outstanding. Calculate the return on assets and return on common equity for Cream of Tomato