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Growth? Company's current share price is

$ 19.85$19.85

and it is expected to pay a

$ 1.25$1.25

dividend per share next year. After? that, the? firm's dividendsare expected to grow at a rate of

4.1 %4.1%

per year.

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

b. Growth Company also has preferred stock outstanding that paysa

$ 2.15$2.15

per share fixed dividend. If this stock is currently pricedat

$ 28.20$28.20?,

what is Growth? Company's cost of preferred? stock?

c. Growth Company has existing debt issued three years ago witha coupon rate of

6.5 %6.5%.

The firm just issued new debt at par with a coupon rate of

6.4 %6.4%.

What is Growth? Company's cost of? debt?

d. Growth Company has

4.94.9

million common shares outstanding and

1.11.1

million preferred shares? outstanding, and its equity has atotal book value of

$ 50.2$50.2

million. Its liabilities have a market value of

$ 19.7$19.7

million. If Growth?Company's common and preferred shares arepriced as in parts

?(a?)

and

?(b?),

what is the market value of Growth? Company's assets?

e. Growth Company faces a

40 %40%

tax rate. Given the information in parts

?(a?)

through

?(d?),

and your answers to those? problems, what is Growth? Company'sWACC?

?Note: Assume that the firm will always be able to utilize itsfull interest tax shield.