Question: 10 points S Corp. is expected to pay a $2.55 dividend at year end, the dividend is expected to grow at a constant rate of

10 points S Corp. is expected to pay a $2.55 dividend

10 points S Corp. is expected to pay a $2.55 dividend at year end, the dividend is expected to grow at a constant rate of 4.50% a year, and the common stock currently sells for $35 a share. The before-tax cost of debt is 5.50%, and the tax rate is 40%. The target capual structure consists of 40% debt and 60% common equity. What is the company's WACC? Do not round your intermediate calculations. a. 6.96% O b.9.27% C. 8.39% d. 7.49% e. 9.05%

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