Question: 4 Assigned Problem 4 5 6 Grateway Inc. has a corporate cost of capital of 11.5 percent. Its target capital structure 7 is 55 percent

4 Assigned Problem 4 5 6 Grateway Inc. has a corporate cost of capital of 11.5 percent. Its target capital structure 7 is 55 percent equity and 45 percent debt. The before-tax cost of debt is 9 percent, and the 8 company's tax rate is 30 percent. If the expected dividend next period (D1) and current stock 9 price are $5 and $45, respectively, what is the company's growth rate? 10 Hint: First solve for the cost of equity R(Re). 11 ANSWER 12 13

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