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QUESTION 2. (15 MARKS) RWQ Company has 50,000 bonds outstanding. The bonds are selling 92% of face value, ($1,000) have a 6% coupon rate, pay interest semi-annually. There are 100.000 shares of $550 (divided) preferred sock outstanding with a current market price of 565 a share. In addition, there are 1.30 million shares of common stock outstanding with market price of $84 a share and a beta of 0.25. The common stock jupt paid $4.36 in dividends and it is expected to prow by 4% annually. The firm's marginal tax rate is 30%. The stock market risk premium is 95 and the Treasury bill rute % 1 What is the cost of equity-based on the dividend growth model 2 marks) 2. What is the cost of equity-based on the security market line? Explain any difference with (1) marks) 3 What is the cost of financing using preferred stock marks) 4 What is the thertax cost of debt financing (2 marks) 5. What is the weighted average cost of capital, using the cost of equity-based Interpret your answer marks) 6. Assume the company requires 54,000,000 to fund a new project. What amount must the company ise, if flocation costs are for det, for common equity, and for preferred equiry marks) QUESTION 2. (15 MARKS) RWQ Company has 50,000 bonds outstanding. The bonds are selling 92% of face value, ($1,000) have a 6% coupon rate, pay interest semi-annually. There are 100.000 shares of $550 (divided) preferred sock outstanding with a current market price of 565 a share. In addition, there are 1.30 million shares of common stock outstanding with market price of $84 a share and a beta of 0.25. The common stock jupt paid $4.36 in dividends and it is expected to prow by 4% annually. The firm's marginal tax rate is 30%. The stock market risk premium is 95 and the Treasury bill rute % 1 What is the cost of equity-based on the dividend growth model 2 marks) 2. What is the cost of equity-based on the security market line? Explain any difference with (1) marks) 3 What is the cost of financing using preferred stock marks) 4 What is the thertax cost of debt financing (2 marks) 5. What is the weighted average cost of capital, using the cost of equity-based Interpret your answer marks) 6. Assume the company requires 54,000,000 to fund a new project. What amount must the company ise, if flocation costs are for det, for common equity, and for preferred equiry marks)