QUESTION 34

1. A company just paid a $2.00 dividend, expected to grow at 2% indefinitely. If the firm's stock can be sold for $19 per share, what is the cost of common equity?

   		11.98%
   		11.69%
   		12.01%
   		12.74%
   		none of these

4 points

QUESTION 35

1. A firm's cost of debt is 4.9%, its cost of preferred stock is 10.3% and its cost of common equity is 12.4%. If the capital structure is 40% debt, 20% preferred, and 40% common, determine the WACC.

   		6.37%
   		7.04%
   		8.98%
   		8.67%
   		none of these