Part A: WACC Calculations $-1$ point total

ISS' stock is currently selling for $$50\mathrm{.}00$ per share. The company just paid a $$1\mathrm{.}00$ dividend which is expected to increase at a rate of $5\%$ forever. ISS' Beta is $1\mathrm{.}25.$ The risk$-$free rate is $4\mathrm{.}50\%$ and the market risk premium is $6\mathrm{.}00\%.$

ISS has a debt issue outstanding with a $3\%$ semiannual coupon and $19$ years to maturity. The bonds are selling at $90\%$ of par with a face value of $$1,000.$

ISS' target capital structure is $80\%$ equity, $20\%$ debt. Their combined corporate tax rate is $25\%.$

Use the first tab $($WACC Calculations$)$ in the template worksheet to calculate ISS' WACC. Your resulting WACC will flow over to the CAPEX tab.