Question 12. Use the provided information for Radical, Inc. (RAD) to solve the questions. SHOW ALL WORK.

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WACC: Beta = 1.05 Market Return = 10.50% Risk Free Rate = 1% Weight of Debt = 15% Weight of Equity = 85% After-Tax Cost of Debt = 3%

DDM: Dividend/Share in Year One = D(1) = $2.20/share Terminal Gr = 3% Interim Gr = 5% Blended Weight = 20%

DCF: Free Cash Flow in Year One = FCF(1) = $3,000 Terminal Gr = 3% Interim Gr = 7% Total Debt = $12,000 Cash & Cash Eq. = $4,000 Shares Outstanding = 1,200 Blended Weight = 80%

P/E: Next Year EPS = $0.74/share Current P/E = 42 Blended Weight = 20%

What is RAD's WACC? What is RAD's current target price using the dividend discount model (DDM)? What is RAD's current target price using the discounted cash flow model (DCF)? What is RAD's current target price using price-to-earnings multiple (P/E)? What is RAD's blended current target price?