3. The target capital structure for QM Industry is 40% common stock, 10% preferred stock and...

 

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3. The target capital structure for QM Industry is 40% common stock, 10% preferred stock and 50% debt. If the cost of equity is 18%, the cost of preferred stock is 10% and the before cost of debt is 8%, and the firm's tax rate is 35%, what is QM's weighted average cost of capital. (4 marks) 4. Hoak Company's common stock is currently selling for $50. Last year's dividend was $1.83 per share. Investors expect dividends to grow at an annual rate of 9% into the future. What is Hoak's cost of common equity? (1 mark) a. 3. The target capital structure for QM Industry is 40% common stock, 10% preferred stock and 50% debt. If the cost of equity is 18%, the cost of preferred stock is 10% and the before cost of debt is 8%, and the firm's tax rate is 35%, what is QM's weighted average cost of capital. (4 marks) 4. Hoak Company's common stock is currently selling for $50. Last year's dividend was $1.83 per share. Investors expect dividends to grow at an annual rate of 9% into the future. What is Hoak's cost of common equity? (1 mark) a.

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