Question: Practice Assignment #8 Question 14 (1 point) A firm has a total market value of $200 millions. The market value of debt is $80 millions

Practice Assignment #8

Question 14 (1 point) A firm has a total market value of $200 millions. The market value of debt is $80 millions and that of equity is $120 millions. The before tax cost of debt is 10% and the cost of equity is 15%. Calculate the weighted average cost of capital: (WACC) (Assume tax rate T = 21%) 12.16% 13.0% O 11.8% 13.85% Question 15 (1 point) KALM Corporation has its common stock selling for $55/share and the current dividend (D) is $2.50/share. If dividends are expected to grow at 7% per year for ever; then the firm's cost of retained earnings (equity) is: 11.86% 10.45% 12.22% 11.55%

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