Hello! I am in need for some assistance on an assignment of mine. Thank you in advance.

Bob needs help calculating the weighted average cost of capital for Fundamental Toys. You receive an email. Email from Bob: Fundamental Toys inc. is expected to pay a $1.55 dividend at year-end (D1 = $1.55). The dividend is expecte constant rate of 5.75% a year, and the common stock currently sells for $31.50 a share. The before-tax cost 6.50%, and the tax rate is 45%. The target capital structure consists of 40% debt and 60% common equity. Deliverables 1. The cost of equity. 2. The after-tax cost of debt. 3. The company's WACC, if all equity is from retained earnings. The dividend is expected to grow at a e. The before-tax cost of debt is 60% common equity. A company pays $0.75 in dividends this year. Next 3 years it expects the growth rate of 25%, then it will switch to the regular 8% growth. WACC=11.5%. How would you calculate the Present value of that stock? Activity 2: This one is a much simpler example of the WACC. Solution: 1. Cost of equity= K= D1/P0 + g = calculate -X 2. Afer tax cost of debt = calculate -Y 3. WACC= percentage of equity* X + (1-percentage of equity) *Y