1. Mack Industries just paid a dividend of $1.00 per share. Analysts expect the company's dividend to grow 20 percent this year, and 15 percent next year. After two years the dividend is expected to grow at a constant rate of 5 percent. The required rate of return on the company's stock is 12 percent. What should be the current price of the company's stock

2. Bilee Company%u2019s financial manager, Mr. STEPHENS, has collected the following information to calculate its WACC:

%u2022 Wilee%u2019s capital structure consists of 40% debt and 60% common stock.

%u2022 Wilee has 25-year, 12% annual coupon bonds that have a face value of $1,000 and sell for $1,252.

%u2022 Wilee uses the CAPM to calculate the cost of common stock. Currently, the risk-free rate is 5% and the market risk premium is 6%. Wilee%u2019s common stock has a beta of 1.6. Wilee%u2019s tax rate is 40%.(7 points)

a. What is the company%u2019s after-tax cost of debt?

b. What is the company%u2019s cost of common equity?

c. What is the company%u2019s weighted average cost of capital (WACC)