As consultant to capitalStrux-What is Hick WACC

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Reference no: EM131919532

1. As a consultant to capitalStrux, whose target capital structure is 35% debt, 10% preferred, and 55$ common equity. the rate on new debt is 6.50%, the yield on the preferred is 6.00% the cost of common stock from reinvested earnings is 11.25%, and the tax rate is 40%. the firm will not be issuing any new common stock. What is Hick's WACC?

a. 9.54%

b. 8.82%

c. 8.15%

d. 9.17%

e. 8.48%

please, show me your solution.

2. Hom Inc. 's stock currently sells for $30.00 per share. the dividend expected to increase at a constant rate of 4.00% per year. the required rate of stock, r, is 10.00% what is the stock's expected price 5 years from now?

a. $36.50

b. $33.00

c. $34.00

d. $48.33

please, show me your solution.

Reference no: EM131919532

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