Question: What is the cost of equity using CAPM? What is the cost of equity using the Dividend Discount Model? Bond Maturity (Years) Annual Coupon

Bond Maturity (Years) Annual Coupon Rate Bond Price Par Value Marginal Tax Rate Preferred Stock Price

To 23 Marginal Tax Rate 8.0% 9.0% 12.0% 40.0% Target Capital Structure Debt Preferred Stock Common Equity

What is the cost of equity using CAPM? What is the cost of equity using the Dividend Discount Model? Bond Maturity (Years) Annual Coupon Rate Bond Price Par Value Marginal Tax Rate Preferred Stock Price Preferred Dividend 10.0 8.0% $ 877.11 $1,000.00 $ 25.00 3.00 S TOF TM Beta 8 40.0% Do Po B-Y-R-P 4.0% 12.0% 1.5 5.0% 2.00 $ 21.00 4.0% 55 To 23 Marginal Tax Rate 8.0% 9.0% 12.0% 40.0% Target Capital Structure Debt Preferred Stock Common Equity What is the weighted average cost of capital (WACC)? 40% 20% 40%

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