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Provide excel with formulations or resolution.
ABC Corp's WACC
(a) ABC Corp shares are currently trading at $69.25 each. The yield on the company's debt is 4% and the firm's beta is 0.25. The T-Bill rate is 4% and the expected return on the market (E (kM)) is 11%. The company's target capital structure is 20% debt and 80% equity. The company pays a combined income tax rate of 20%. The GST rate is 13%. What is ABC's cost of equity? Show your work and provide a statement clearly indicating your answer.
(b) Using the information outlined above, calculate ABC's cost of debt (after tax). Show your work and provide a statement clearly indicating your answer.
(c) What is ABC's weighted average cost of capital? Show your work and provide a statement clearly indicating your answer.
(d) ABC's key rival, Neil Corp has a 7 percent preferred stock outstanding that is currently selling for $48 a share. The preferred stock has a $100 par value. The market rate of return is 10 percent and the firm's tax rate is 34 percent. GST is 13%. What is Neil Corp's cost of preferred stock? Show your work and provide a statement clearly indicating your answer.
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