1. Suppose you had to determine r, the cost of equity, based on the following information. Assume the last dividend paid was $1.70. Dividends grow at a constant rate of 5% per year. Current Stock Price is $40.00. The risk-free rate of return is .045 and the market risk premium is 10. The Beta for this security is 75. What is the cost of cquity? 2. If a firm has a debt-equity ratio of 1, what is the capital structure weight (E/V) for equity? 3. A firm's long-term sources of capital are as follows: Preferred stock: 500,000 Debt: 500,000 Common Equity: 1,000,000 The firm is trying to get a more accurate read on its current cost of debt capital. Its bonds were issued at par three years ago, and now have twelve years until maturity. Interest of $75 per year is paid, and payments are made annually. Their bonds are currently trading on the sccondary market for S926.55. Preferred pays $4 and is selling for $60 share, and they just issued a dividend of 1.60 per share. They grow dividends by 1.5% per year. The stock currently sells for S10. The stock has a beta of 1.7 and T-bills are at 2%. The market risk premium is 6% What is your estimate of WACC? Tax rate = 40% 4. A firm paid the following dividends over the past 4 years: $1.25, S1.75, S2.50. $3.00 They plan to pay a dividend of $3.60 next month If their stock is trading at $60, what is your best estimate of their cost of equity