to pay any dividends XYZ Corp has 2,000 shares of common stock outstanding with a current stock price of $10. The bota of the company's equity is 1.2. XYZ is not expected Treasury billis currently yield 5%, and the market risk premium is 4%. XYZ Corp's debt consists of 20-year bonds that were just issued with a 5% annual coupon. The bonds trade at $1,200. The total market value of XYZ debt outstanding is $40,000 XYZ han 1,000 shares of preferred stock outstanding on which it pays a constant S1 dividend. The current preferred stock price is $5. The corporate tax rate is 25%. Calculate XYZ cost of equity using the dividend growth model approach. Not possible to calculate 9.8% 996 596