1. SASSY, Inc. stock has a beta of 1.2, the expected return on the market is 13.5% and the current risk-free rate is 5%. What is SASSYs cost of equity?
2. DOG, Inc. has a $20 million, 8.25%, 10 year-year bond issue selling at 97. The bond pays annual interest. What would be the before tax component cost of debt for DOG? Assuming they are in the 21% tax bracket and have unconstrained ability to take advantage of the tax benefits of debt, calculate their after-tax cost of debt.
3. SHED-A-LOT, Inc. has two million shares of common stock outstanding selling at $27 per share. They also have one million shares of preferred stock outstanding and 10,000 bonds. Preferred shares are selling for $14.50 per share and the bonds are selling at 98. Calculate the weight you should use for the equity in the computation of SHED-A-LOTs WACC.
4. CATSDROOL, Inc. has a target capital structure of 65% equity and 35% debt. The firm has a before-tax cost of debt of 8% and is in the 21% tax bracket. The cost of equity for the firm is 13%. Calculate the WACC for CATSDROOL assuming they can take full advantage of the tax benefit of debt.
5. GOLDENRETRIEVERSRULE, Inc. (GRRR) has 5 million common shares outstanding. Each share sells for $24 per share and the GRRR management is expected to set the next annual dividend at $2.25 per share. Investors, analysts and stakeholders all expect the future dividends of GRRR to grow indefinitely by 8% per year. The stock has a beta of 2.2, the current risk-free rate is 5.5%, and the expected return on the market is 11%. GRRR also has 1 million shares of 5% preferred stock outstanding, with these shares selling for $44 per share. The company has 150,000, 15-year, 9% annual bonds outstanding which are currently selling at 112.00. GRRR is in the 21% tax bracket and expects to be able to take full advantage of any interest tax shields. What is the firms WACC? HINT - Absent guidance concerning which estimate (CAPM or Constant-Growth) is more appropriate, the best approach is to calculate both and use the average!

Please answer questions 1-6. Also, please clearly write out the solutions and steps in financial calculator keystrokes rather than Excel. Thank you in advance!