1.Company A has a stock price of $29. The firm will pay a dividend next year of $1.89, and its…

1.Company A has a stock price of $29. The firm will pay a dividend next year of $1.89, and its dividend is expected to grow at a rate of 5.6% per year thereafter. What is your estimate Company’s A cost of equity capital?

2.Company A has a price of $42 and will issue a dividend of $3.3 next year. It has a beta of 1.77, the risk-free rate is 6.4%, and it estimates the market risk premium to be 6.2%.
Under the Capital Growth Dividend Model (CDGM), at what rate do you need to expect Company’s A dividends to grow to get the same equity cost of capital as with using the Capital Asset Pricing Model (CAPM)?

3.Company A has a cost of equity of 18.3%, has an effective cost of debt of 6%, and is financed 72% with equity and the remaining with debt. What is this firm’s WACC?

4.Company A has a cost of equity of 16.01%, has a yield to maturity of 4.66%, and a cost of preferred stock of 8.79%. The market values of its debt, preferred stock, and equity are $77.66M, $11.85M and $226.57M, respectively. The tax rate for the company 49%. What is this firm’s WACC?