a. Assume that X Company has common stock outstanding with a current market value of $55 per share, current dividend of $4 per share, and a dividend growth rate of 8% forever. Calculate the company cost of equity capital. b. X Company also has preferred stock outstanding with par value of $76, dividend per share of $7, and a current market value of $56 per share. Calculate the company cost of preferred stock. c. The interest rate for the debt of X company is 14%. What is the after-tax cost of debt if the income tax rate is 25%. d. The total value of the X company's assets is 1 million $, in which debt accounts for 35%, the total market value of common stock is $560,000, the rest is preferred stock. What is the Weighted Average Cost of Capital (WACC) of the X company? f. Assume that X has a company beta of 1.3. The risk-free rate is 5% and the expected return on the market is 13.4%. Calculate the cost of equity capital?
