Question: Stephanos Structures Limited (SSL) has common stock outstanding with a current share price of $58, and a book value per share of $6. Dividends paid

Stephanos Structures Limited (SSL) has common stock outstanding with a current share price of $58, and a book value per share of $6. Dividends paid by the company for the last number of years are given in the table below; the most recent dividend received by the common shareholders was $3.40 in 2021.

SSL also has one bond issue outstanding with an 8% coupon (semi-annual payments), and selling for 98.5% of par. The issue matures in 6 years The company's tax rate is 35% and the debt-to-equity ratio of 0.6.

a) Calculate SSL's cost of debt. (6 marks)

b) Calculate SSL's cost of equity (5 marks)

c) What are SSL's capital structure weights? (2 marks)

d) What is SSL's Weighted Average Cost of Capital (WACC)? (2 marks)

Year	2021	2020	2019	2018	2017
Dividend	$3.40	$3.25	$3.05	$2.75	$2.50

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