Westfield Enterprises value is $500,000. Its debt is $100,000. Preferred stock is $50,000. Its 30-year bond is currently sold at $1,050. The coupon rate is 8%. It just paid $2 dividend for preferred stock holders last quarter. The dividend they just paid to their shareholders was $1.5. We expect the dividend growth rate is 4% annually. The current market price of a common stock is $15, and the preferred stock is currently traded at $80. The corporate tax rate for Westfield Enterprise is 35%. The 3-month T-Bill is 3%.Westfield Enterprise has the beta of 2.5. The market return is expected to be 8% per year.

QUESTION 33 10 points Save Answer What is the cost of common stock by using constant dividend growth model? 1. 10.4% 2. 12.4% 3.14.4% 4.16.4% QUESTION 34 10 points Save Answer What is the cost of common stock by using CAPM? 1.13.5% 2. 14.5% 3. 15.5% 4.16.5% QUESTION 35 10 points Save Answer What is the WACC? (Hint: to plug in the cost of common stock in the WACC, you need to take the average of the costs of common stock by the two methods: constant dividend growth model and CAPM, again, take the average answers of the previous two problems!) 1. 10.45 2. 11.45% 3.12.45% 4.13.45%