******JUST NEED SOMEONE TO CHECK MY WORK****

The Greg Co. has 1,788,825 shares of common stock, currently trading at $50.50 /share. The common stock of Greg Co. is expected to pay a dividend next year of $2 /share, and it has a Beta calculated at 1.4. It also has 77,775 shares of preferred stock, trading at $ 101 (6) /share. The preferred stock pays dividends of 7.5 %. Finally, Greg Co. has 35,075 bonds currently trading at $1,440 /bond. The coupon rate is 3 %, and the bonds will mature in 18 years.

Greg Co. expects its dividends to grow at a rate of 17 %/year, and it is in a 21% tax bracket. It estimates that the risk free rate of return is 1.5 % and the market rate of return is 16%.

Calculate the WACC for Greg 1) Co. Be sure to show all your work. NOTE: When calculating the cost of equity, compute the cost using the CAPM method and the DCF (Dividend Constant Growth Method) and average the two.

E = 1,788,825 * 50.50 = 90,335,662.5 / 148,698, 937.50 = .6075

P = 77,775 * 101 = 7,855,275 / 148,698, 937.50. = .0530

D = 35,075 * 1440 = 50,508,000 / 148,698, 937.50. = .3396

148,698, 937.50

i_e = D₁ / P + g 1.5 + (16-1.5)(1.4)

= 2/50.5 + .17. = 21.8

= .0396. 21.8+.0396 / 2

i_e = 10.9

i_p = D/P

= 7.5/101

= .07425

= 7.4

(1-tr)= 1-.015

= .985

P/Y = 2

1. = 18*2

I = Solved for

1. = 1440
2. = 1000

PMT = 1000*7.5% 75/2 = 37.5

4.04*.985 = 3.9794

.6075*10.9 + .0530*7.4 + .3396*3.9794

WACC = 8.37