Question 4 (2.5 points) Panda company just paid a $5.00 annual dividend. The dividend is supposed to grow at 4% each year forever. If the current stock price of the company is $40, the cost of equity for the company should be OA A) 17.00% B) 15.50% C) 16.50% D) 16.00% Question 5 (2.5 points) Hippo company has a preferred stock that pays a 6% annual coupon selling for 150% of par. What is the cost of preferred stock for the company? A) 6% B) 4% C) 5% D) 7% Question 6 (2.5 points) Consider the following scenario: Suppose a company has 100 million common shares outstanding, and each share sells for $20. We have estimated that the shares have a beta of 1.2, the risk-free rate is 3%, and the expected market return is 8%. The marginal tax rate for this company is 21%. The company also has $2 billion of bonds outstanding and the yield to maturity on these bonds is 5%. The company has a target capital structure of 60% equity and 40% debt. It does not and will not issue preferred stocks in the future. What is the cost of equity for this company? A) 8% B) 7% C) 6% D) 9%