Growth Company's current share price in $10.50 and it is expected to pay $0.90 dividend per share next year. After that, the firm's dividends are expected to grow at a rate of 3,7% per your a. What is an estimate of Growth Company's cost of equity? b. Growth Company has preferred lock outstanding that pays a $2.00 per share ved dividend. If this stock is currently priced at 5:28.05, what is Growth Company's cost of proferred stock? c. Growth Company has existing debted three years ago with a coupon rate of 6.1%. The firm and new debt al par with a coupon roof 64 What is Growth Company's cost of debt? d. Growth Company has 5.3 million common shares outstanding and 1.1 million preferred shares outstanding, dits only has a total book of 502 million liabilities have a market value of $19.6 million I Growth Company's common and preferred share priced as in partea) and (b), what is the market value of Growth Company's most? e. Growth Company faces s 35% tax rate. Given the information in partea through (d), and your answers to those problems, what is Growin Company WACC? Noter Asume that the firm will always be able to utilize its full interest tax shield a. What is an estimate of Growth Company's cost of equity? The required return (cost of capital) of levered equity is % (Round to two decimal places.) b. Growth Company also has preferred stock outstanding that pays a $2.00 per stare fixed dividend. If this stock is currently priced at $28.05, what is Growth Company's cost of preferred stock? The cost of capital for preferred stock is /%, (Round to two decimal places.) c. Growth Company has existing debt issued three years ago with a coupon rate of 6.1%. The firm just issued new debe at par with a coupon rate of 6.4%. What is Growth Company's cost of debt? (Select from the drop down menus.) The pretix cost of debt is the 's YTM on current debt. Since the fim recently und debt at por, then the coupon rate of that debt must be YIM of the debt. Thus, the pre-te cost of debtis the d. Growth Company has 5.3 million common shares outstanding and 1.1 million preferred shares outstanding, and its equity has a total book value of $50.2 milion its Habilities have a market value of $19.6 million I Growth Company's common and preferred shares are priced at in parts (a) and (b), what is the market value of Growth Company's mots? The market value of asset is million (Round to wo decimal places) e. Growth Company faces a 35% tax rate. Given the information in parts (a) through (d), and your answers to those problems, what's Growth Company's WACC? The weighted average cost of capital is 1% (Round to two decimal places)
