Question: what is ur closest answer? or anything, also need 5 and 6 answered Questions 4-6 ABC Corporation is estimating its WACC. Its target capital structure

 what is ur closest answer? or anything, also need 5 and
what is ur closest answer? or anything, also need 5 and 6 answered

Questions 4-6 ABC Corporation is estimating its WACC. Its target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common cquity. Its bonds have an 11 percent coupon, paid semiannually, a current maturity of 15 years, and sell for $1,050. The firm could sell, at par, $100 preferred stock which pays a 12 percent annual dividend, but flotation costs of 5 percent would be incurred. ABC Corp's beta is 1.0, the risk-free rate is 8 percent, and the market risk premium is 5.5 percent. ABC Corporation is a constant-growth firm which just paid a dividend of $2.00, sells for $27.00 per share, and has a growth rate of 8 percent. The firm's policy is to use a risk premium of 4 percentage points when using the bond-yield-plus-risk-premium method to find t Firm's marginal tax rate is 35 %. 4. What is ABC firm's cost of debt for the purpose of calculating WACC? a. 3.7% b. 4.1% c. 4.9% d. 3.4% e. 5.9% 5. What is the firm's cost of common stock (c) using the dividend discount model approach? A. 15.6% B. 14.1% C. 16.3% D. 16.6% E. 16.0% 6. What is ABC firm' cost of common stock (c) using the CAPM approach? a. 13.5% b. 14.1% c. 16.0% d. 15.6% a 14 004 En

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