Question: no excel or table please You are given the task of calculating the cost of capital of Kingston Toys. The company faces a tax rate

no excel or table please You are given the task of calculatingno excel or table please

You are given the task of calculating the cost of capital of Kingston Toys. The company faces a tax rate of 40%. The company has 100,000 common shares. You estimate that the beta of the common stock is 1.5. The equity market risk premium is estimated to be 5%, and the risk-free rate is 5%. The company has just paid a dividend of $2 per share. You expect that the dividends will grow at a rate of 15% until Year 4. After Year 4, the dividends are expected to grow at a constant rate of 5%. You decide to employ the CAPM approach to calculate the cost of equity. The company has two different debt issues that are outstanding. The first issue consists of 1,000 semi-annual coupon bonds. Each bond has a face value of $1000. The annual coupon rate is 10%, and the bonds are currently trading at a YTM that equals 12%. The bonds will mature 10 years from now. The second issue consists of 1000 zero coupon bonds. Each bond has a face value of $1000, and will mature 15 years from now and is trading at 50% of its face value. Using the information provided above, calculate the weighted average cost of capital of Kingston Toys

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