Question 21 10 pts Floatation Expense = Po = Price of stock = $40.00 7.0% ROE = 12.00% Dividend Payout Ratio = 40% Dividend just paid = $1.25 What is cost of equity (rs)? (answer in 4 decimal points, e.g., 0.1075) gL = ROE x (1 - Payout Ratio) D1 = Do (1 + g.) Net Proceed = Pox (1 - f) "rs" = [D1 : Net Proceeds] + GL Question 22 10 pts Number outstanding= n = Po = Stock Price = $48.00 31,000 Number Outstanding= 1,000 Bond Price = $925.00 YTM = 7.0% RM = 10.0% Rx = 3.0% BL = 1.5 Tax = 25% What is the WACC after tax? (Please answer in decimal points, e.g., 0.1595 not 15.95%) r's = rf + b[ X (Rm -rf) WACC = Waxrox(1 - T) + W, xrs Question 23 5 pts Michigan, Inc. E = $200,000 D = $50,000 Current levered Beta BL = 1.20, Taxes = 25% What is the unlevered beta at this capital structure? BU - BL+ [1 +(1 - T) x (D/E)