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Given the following information: ABC firm is going to pay dividend $ 1 per share shortly The current stock price is $ 5 0 per
Given the following information:
ABC firm is going to pay dividend $ per share shortly
The current stock price is $ per share and there are million shares of outstanding stocks
Firm beta is equivalent to market average beta
Constant growth rate is
Market risk premium is and risk free rate is
Total value of debt is $ million
Cost of borrowingissuing bond is
Corporate tax rate
a What is the cost of equity using dividend growth model? List the formula, input numbers and calculate answers
b What is the cost of equity using CAPM model? List the formula, input numbers and calculate answers
c What are the weights for common stock and debt, respectively?
d What is the WACC for your firm using cost of equity from CAPM? List the formula and input numbers, NO calculation needed
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