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Growth? Company's current share price is $20.30 and it is expected to pay a $0.90 dividend per share next year. After? that, the? firm's dividends are expected to grow at a rate of 3.8% per year.

a. What is an estimate of Growth? Company's cost of? equity?

b. Growth Company also has preferred stock outstanding that pays a $2.15 per share fixed dividend. If this stock is currently priced at $28.05?, what is Growth? Company's cost of preferred? stock?

c. Growth Company has existing debt issued three years ago with a coupon rate of 6.2%. The firm just issued new debt at par with a coupon rate of 6.9%. What is Growth? Company's cost of? debt?

d. Growth Company has 5.1 million common shares outstanding and 1.4 million preferred shares? outstanding, and its equity has a total book value of $49.9 million. Its liabilities have a market value of $19.9 million. If Growth? Company's common and preferred shares are priced as in parts ?(a?) and ?(b?), what is the market value of Growth? Company's assets?

e. Growth Company faces a 35% tax rate. Given the information in parts ?(a?) through ?(d?), and your answers to those? problems, what is Growth? Company's WACC?

Financial Management, Finance

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