1. Greshak Corp plans to issue common stock in a public offering at a price of $36.00 per share. The projected dividend per share is $2.00 and is expected to grow by 4.0 percent in the future. If flotation costs are 15.0 percent of the issues gross proceeds, what is the cost of Greshak's external equity?
2. Greshak Corp is considering adding a new press machine that has an invoice price of $900,000 and is expected to cost an additional $30,000 to install and make operational. The new machine is much more efficient than the current press machine used by the company and will increase the company's revenues by $400,000 per year. However, the machine also is more expensive to operate and will result in additional labor costs of $100,000 and operational costs of $75,000. In addition, the new machine will reduce scrap costs by $10,000 per year due to its enhanced technology. Based on management's estimates the new machine would require the company to incur an additional investment in working capital of $20,000 initially, but it would be recovered at the end of project's 5 year life. Greshak would use the 3-year MACRS method to depreciate the machine, and management thinks the machine would have a value of $150,000 at the end of its 5 year operating life. The applicable depreciation rates are 33%, 44.45%, 14.81%, and 7.42% per the U.S. tax code. Assume that Greshak's marginal tax rate is 40%, and a 8% WACC is applicable for the project.

Based on the data presented, what is the TOTAL year 0 net investment cash outlay AND Year 1 relevant net cash flow (this is all you are being asked to calculate) MUST SHOW ALL WORK TO RECEIVE CREDIT.

3.. Greshak Corp. has a target capital structure that calls for 50 percent common equity, 35 percent debt, and 15 percent preferred stock. The current yield to maturity on Greshaks outstanding 7.25 percent coupon bond debt is 6.50 percent, and the company can issue as much debt as it wishes at this rate. The firm's preferred stock currently sells for $48.00 per share and pays a dividend of $1.50 per share each quarter. The current risk free rate of interest is 3.50 percent, the projected return on the equity market is 11.00 percent, Greshak's average return on equity is 11.50 percent and its beta is 1.20. What is the firms weighted average cost of capital (WACC) assuming its tax rate is 40.00 percent?

SHOW ALL WORK AND USE ATLEAST 4 DECIMAL PLACES IN EACH STEP OF CALCULATION. (e.g., 12.25% = .1225