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1. Calculate the WACC for the following company. The company has acapital structure that consists of 50% debt and 50% common stockthe company’s CFO has obtained the following information:
   1. The yield to maturity on the company’s bonds is 7%
   2. The coupon rate on the company’s bonds is 5%
   3. The next expected dividend is expected to be $7.00
   4. The dividend is expected to grow at a constant rate of 5% peryear
   5. The stock price is currently $75 per share
   6. The tax rate is 35%

What is the WACC?

2. Calculate the WACC for the following company: Jelly Inc.’starget capital structure is 40% debt, 10% preferred stock, and 50%common stock.
   1. The company’s 15-year, 7% coupon, 1000 par bonds are sellingfor $980
   2. The risk-free rate is 5%
   3. The expected return on the market is 10%
   4. Jelly ‘s beta is 1.2
   5. The company’s tax rate is 30%
   6. Preferred stock price is $90, and the preferred dividend is$9

What is Jelly’s WACC?

     3.  A company just paida $2.00 per share dividend on its common stock. The dividend isexpected to grow at a constant rate of 7 percent per year. Thestock currently sells for $42 a share. What is the cost ofequity?

Answer should be one decimal point. So, if the answer is 8.12%,enter 8.1.

    4. Outdoor Enterprises has bondsoutstanding that carry an annual coupon of 10 percent. The bondsmature in 15 years and are currently priced at $1,050. The parvalue of the bond is $1,000. What is the firm's pre-tax cost ofdebt?

     5. Advanced Products hasoutstanding bonds that are currently priced at $980. The bondsmature in 12 years and carry an 8% annual coupon. The tax rate is40%. What is the firm’s after-tax cost of debt?