Quiz 5 (50 Points) Name: 01. (10 Points) 2014 $0.8 2015 $0.9 2016 $1.00 2017 $13 Year Dividend $ Change % Change 2018 $1.4 Given the dividend information above, if the dividend just paid is 51.4 in 2018 and the price per share of this company's stock is $64, what is the cost of equity using the dividend growth model? Q2. (10 Points) What is ABC Inc's beta if its expected return is 10.7%, the market risk premium is 6.5%, and the riskless rate is 297 Q3. (15 Points) The debt-to-equity ratio of the CI Corp. is 0.5. To calculate the C1 Corp's cost of equity, use the following information: The Ci Corp's beta is 1.2, expected return on the market is 8%, and the risk-free rate is 2%. Its pretax cost of debt is 4%, what is the company's WACC? The tax rate is 35% Q4. (15 Points) You are trying to estimate the value of the Smoothie company. The expected after-tax cashflows from assets for the next three years are $250m, 8350m, and $500m, respectively. The cash flows are expected to grow at 3% thereafter forever. The estimated WACC is 9%. What is the value of the Smoothie company? Quiz 5 (50 Points) Name: 01. (10 Points) 2014 $0.8 2015 $0.9 2016 $1.00 2017 $13 Year Dividend $ Change % Change 2018 $1.4 Given the dividend information above, if the dividend just paid is 51.4 in 2018 and the price per share of this company's stock is $64, what is the cost of equity using the dividend growth model? Q2. (10 Points) What is ABC Inc's beta if its expected return is 10.7%, the market risk premium is 6.5%, and the riskless rate is 297 Q3. (15 Points) The debt-to-equity ratio of the CI Corp. is 0.5. To calculate the C1 Corp's cost of equity, use the following information: The Ci Corp's beta is 1.2, expected return on the market is 8%, and the risk-free rate is 2%. Its pretax cost of debt is 4%, what is the company's WACC? The tax rate is 35% Q4. (15 Points) You are trying to estimate the value of the Smoothie company. The expected after-tax cashflows from assets for the next three years are $250m, 8350m, and $500m, respectively. The cash flows are expected to grow at 3% thereafter forever. The estimated WACC is 9%. What is the value of the Smoothie company