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Q1. You are a financial manager of a firm and are asked to assess the cost of capital of your firm. You know that .

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Q1. You are a financial manager of a firm and are asked to assess the cost of capital of your firm. You know that . Your firm just paid dividend $2 per share The current stock price is $50 per share Firm beta is 10% higher than market average Constant growth rate is 3% Expected market return is 11% and risk free rate is 1% There is totally 10 million of outstanding shares of stocks, and for each dollar equity, firm issued $1.5 debt Cost of borrowing/issuing bond is 5% Corporate tax rate 30% . Dividend $2 here is [D1 or DO)? What is the value of D1 ? What is the value of DO 2 What is the cost of equity (common stock) using dividend growth model ? (keep 4-digit after decimal point, e.g., 0.1234) Using information from the Q1 What is the market value of stock ? (just keep integer without dollar sign and million, e.g. $100 million -> 100) - What is the market value of debt 2 (just keep integer without dollar sign and million, e.g. $100 million - 100) What is the total firm value ? (just keep integer without dollar sign and million e.g. $ 100 million - 100) To compute WACC there is E/V and D/E in the formula. What is the value for EV and D/V cuse decimal point)

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