Question: If anyone can help me out and solve these problems by using the formulas its asking for, I would greatly appreciate it! Please show work!

 If anyone can help me out and solve these problems by

If anyone can help me out and solve these problems by using the formulas its asking for, I would greatly appreciate it! Please show work!

PROBLEMS ON WACC 1. Textronics has $400M of debt and $800M of Equity on its balance sheet. The firm's bonds have a coupon rate of 7% per year (paid semi-annually), 15 year maturity, $1000 face value. These bonds currently are selling for $1120. The firm's tax rate is 40% and the flotation costs of issuing bonds are 4%. The firm's stock sells for $40/share, currently pays for $1.20 in dividends. Investors expect these dividends to grow at 6% per year forever. The flotation cost of issuing shares is 8%. The book value of equity is $8/share. Going forward, the firm plans to meet 90% of its equity needs internally and 10% of it externally. The firm does not plan any changes in its capital structure. The risk free rate is 4%, firm's beta is 1.1, and the risk premium is 5%. What is the firm's Cost of debt? Cost of internal equity using the dividend growth formula? Cost of external equity using the dividend growth formula Cost of external equity using CAPM? Weighted Average Cost of Capital using the CAPM? Weighted Average Cost of Capital using the Dividend Growth Formula? What assumptions are needed for the firm to use its WACC in valuing investments? 2. XYZ is multi-divisional firm which has an oil services division. Its levered beta is 1.2, and its before tax cost of debt is 8%. Its target D/E for the oil services division is 1.8. If this division was an independent firm its tax rate would have been 0.3, and its cost of debt would have been 7%. XYZ decided that Drill Inc. would be a good proxy for its oil services division. Drill Inc. has a levered beta of 1.5, D/E (target) of 1.2, cost of debt of 6%, and tax rate of 0.25. Risk free rate is 4% and the risk premium (RM -RF) is 5%. nous What is the levered cost of equity of Drill Inc.? What is the unlevered cost of equity of Drill Inc.? What is the levered cost of equity of XYZ's oil services division? What is the weighted average cost of capital for the oil services division

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