Answer Happy

Assume that Kish Inc. hired you as a consultant to help estimate its cost of capital. You have obtained the following data: Do = $0.90; Po = $27.50, and g = 7.00% (constant). Based on the DCF approach, what is the cost of equity from retained earnings? 9.29% 9.68% 10.08% 10.50% 10.92%
You were hired as a consultant to Quigley Company, whose target capital structure is 35% debt, 10% preferred, and 55% common equity. The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of retained earnings is 11.25%, and the tax rate is 40%. The firm will not be issuing any new stock. What is Quigley's WACC? 8.15% 8.48% 8.82% 9.17% 9.54%