Ord Construction Companys debt yields 8% and composes 25% of its overall capital structure. Ord Construction just paid $2 in dividends per share. The dividends of the company are expected to grow at the rate of 25% for the next 5 years. From year 6 onwards, the average growth rate of dividends for the company is expected to decline to 7% per year. The companys estimated beta is 1.4. Assume that the expected return on the S&P 500 index, which you use as a proxy for the market portfolio, is 12%, and the risk free rate is 2%.

1. Calculate Ord Constructions return on equity.
2. What should Ord Constructions price per share be?
3. What would be the price of Ord Constructions stock if the company did not grow and maintained its dividends at the current level of $2 per share?
4. What is the present value of Ord Constructions growth opportunities (PVGO)?
5. Assuming a 21% corporate tax rate, calculate Ord Constructions weighted average cost of capital.