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Montafiori Inc. has a target capital structure in market values) of 60% debt and 40% equity. The firm's debt consists of 8 year, annually payable

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Montafiori Inc. has a target capital structure in market values) of 60% debt and 40% equity. The firm's debt consists of 8 year, annually payable bonds with a coupon rate of 7%, and the bonds are actually traded at 106% of par value. Montafiori's stock currently sells for $100 per share and the last dividend paid (=Do) was $5.00. Investors expect the dividend to grow indefinitely at a constant rate of 10% per year. The company's tax rate is 40%. 11) Calculate Montafiori's after-tax cost of debt (in %, 2 decimal places)? A. 7.57% B. 6.47% C. 6.03% D. 3.62% E. 2.41% 12) Calculate Montafiori's cost of equity (in %, 2 decimal places)? A. 11.50% B. 12.75% C. 15.00% D. 15.50% E. 16.25% 13) Calculate Montafiori's WACC (in %, 2 decimal places)? *****

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