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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: $1.62/share
Expected dividend growth rate in perpetuity: 3.5%/year
Current market price of company's common stock: $13.00/share
Company's debt is in the form of 7-year, 11%(annual) bonds with a face value of $1,000 per bond. Current market value of bonds is $1,058.81/bond
Number of common stocks outstanding: 21,000,000
Market value of total capital: $420 million
The company's marginal tax rate: 35%
Calculate the weights of debt and equity in the company's capital structure
95% and 5%
50% and 50%
35% and 65%
I don'tCalculate the cost of common equity for the company
16.40%
46.29%
12.46%
15.96%
Calculate the cost of the company's debt
4.91%
9.80%
9.82%
8.84%
If the answers to the above three questions are: WD =30%, RD =8% and RE =14%, calculate the weighted average cost of capital for the company
11.36%
12.20%
11.00%
None of the above. WACC can't be found without WE

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