The Dempere Imports Company's EPS in $2014$ was $$1\mathrm{.}85,$ and in $2009$ it

was $$1\mathrm{.}12.$ The company's payout ratio is $40\%,$ and the stock is currently

valued at $$62\mathrm{.}35.$ Flotation costs for new equity will be $12\%.$ Net income

in $2015$ is expected to be $$15$ million.

The company's investment banker estimates that it could sell $10-$year

semiannual bonds with a coupon rate of $7\%.$ The face value would be

$$1,000$ and the flotation costs for a bond issue would be $3\%.$ The market$-$

value weights of the firm's debt and equity are $30\%$ and $70\%,$ respectively.

The firm faces a $35\%$ tax rate.

a$.$ Based on the five$-$year track record, what is Dempere's EPS growth

rate? What will the dividend be in $2015?$

b$.$ Calculate the firm's cost of retained earnings and the cost of new

common equity.

c$.$ Calculate the break$-$point associated with retained earnings.

d$.$ What is the firm's after$-$tax cost of new debt?

e$.$ If Dempere's after$-$tax cost of debt is $6\%,$ what is the WACC with

retained earnings? With new common equity?

f$.$ Create a scatter chart that shows the firm's marginal WACC as a step

function. The $x-$axis should go to at least $$20$ million. Be sure to fully

label the chart, including a data label with leader lines that shows the

value of the break$-$point.