q10/11

Assume that you are a consultant to Morton Inc., and you have been provided with the following data: DO = $1.4; PO = $36; and g = 4.8% (constant). What is the cost of equity from retained earnings based on the DCF approach? 09.08% 09.48% O 9.68% O 9.28% O 8.88% Several years ago the Haverford Company sold a $1,000 par value bond that now has 38 years to maturity and an 11.5% annual coupon that is paid quarterly. The bond currently sells for $890.85, and the company's tax rate is 32%. What is the component cost of debt for use in the WACC calculation? O 9.39% O 9.69% O 8.79% 09.09% O 8.49%