Questions and Problems: Calculating Cost of Equity. Buller Butter Ltd has just paid a dividend of $1.40 per share on its ordinary shares. The company is expected to maintain a constant 5.7% growth rate in its dividends indefinitely. If the share price is $32, what is company cost of equity? 1. Calculating Cost of Debt. Jimmy's Criket Farm issued a 30-year, 5% half-yearly bond seven year ago. The bond currently sells for 98% of its face value. The company's tax rate is 30% 7, a. b. c. What is the pre-tax cost of debt? What is after-tax cost of debt? Which is more relevant, the pre-tax or the after-tax cost of debt? Why? 9. Calculating WACC. Haparapara Jewels Ltd has a target capital structure of 60% ordinary shares, 10% 5% and preference share and 30% of debt. Its costs of equity is 12.75%, the cost of preference share is 62 the costs of debt is 6.3%. the relevant tax rate is 30%. a. What is the company's WACC under a classical tax system