ost will be incurred. The 14 If the sold? a. $1,600,000 b. $0, the firm still has some retained earnings to irthe company ends up spending $2 million of new capital, how much new common stock must be $410,000 $200,000 e. $250,000 15 15 1s Calculate WACC2 in the MCC schedule a. 14.16 percent b. 13.30 percent e. 13.88 percent d. 14.92 percent e. None of the above. P (1F 2008 15 The table million shares outstanding, the firm's common stock is now (1/1/17) selling for $2 the expected dividend at the end of the current year (2017) is 30 percent of the investors expect past trends to continue, g may be based on the earnings growth rate. of compounded growth are reflected in the data.) e eamings per & Co. over the past six years. With 6 4.60 per share, and 2016 EPS. Because (Note that 5 years YEAR 2011 2012 2013 EPS 1.14 1.65 1.94 YEAR 2014 2015 2016 EPS 2.21 2.52 2.95 The current interest rate on new debt is 7 percent. The firm's marginal tax rate is 40 percent. The firm's capital structure, considered to be optimal, is 25 percent debt and 75 percent common equity. Calculate the weighted average cost of capital (assume that no new common stock has to be sold). . 19.46 percent 19. I 8 percent . 15.62 percent 14.37 percent None of the above is within 0.2 percent page 6 112