Suppose $P_0=30$ and $D=\$2.25$
$D_{-1}=\$2.22$ and $D_0=\$2.28$. If $P_0=\$48$, what is the cost of equity?
$R = \dfrac{D_0 \times (1+g)}{P_0} +g$ ; $g=\dfrac{\$2.28-\$2.22}{\$2.22}=.027$
A firm had 1,000 shares outstanding, each worth $\$30$. The risk free rate is $5\%$, the expected return on the market is $12\%$ and the stock's beta is 1.5. The firm has debt worth $\$20,000$ with a yield to maturity of $8\%$. $\tau_C=35\%$. What is the firm's WACC?
EBIT is $\$500$, depreciation is $\$50$; there was zero capital spending and zero change in net working capital. The tax rate is $35\%$. If WACC is $11.38\%$ with a $1\%$ growth rate, was is the value of the firm?