q12/13

Your company's stock sells for $45 per share, the last dividend (DO) was $2.8, its growth rate is a constant 4 percent, and the company will incur a flotation cost of 13 percent if it sells new common stock. What is the firm's cost of new equity, re? O 9.94% O 11.44% O 10.94% O 9.44% O 10.44% You were hired as a consultant to Keys Company, and you were provided with the following data: Target capital structure: 48% debt, 11% preferred, and 41% common equity. The after-tax cost of debt is 4.3%, the cost of preferred is 7.9% and the cost of retained earnings is 10.4%. The firm will not be issuing any new stock. What is the firm's WACC? O 7.20% O 7.60% O 7.40% O 8.00% O 7.80%