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Use the following information on ABC, Inc. to answer the first four questions: Dividend expected to be paid to Common stock investors in year one:
Use the following information on ABC, Inc. to answer the first four questions:
Dividend expected to be paid to Common stock investors in year one: $share
Expected dividend growth rate in perpetuity: year
Current market price of company's common stock: $share
Company's debt is in the form of year, annual bonds with a face value of $ per bond. Current market value of bonds is $bond
Number of common stocks outstanding:
Market value of total capital: $ million
The company's marginal tax rate:
Calculate the weights of debt and equity in the company's capital structure
and
and
and
I don'tCalculate the cost of common equity for the company
Calculate the cost of the company's debt
If the answers to the above three questions are: WD RD and RE calculate the weighted average cost of capital for the company
None of the above. WACC can't be found without WE
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