Alpha Products maintains a capital structure of 45% debt and 55% common equity. To finance its capital budget for next year, the firm will sell $50 million in 12.5% debentures at par and finance the balance of its $125 million capital budget with retained earnings. Next year Alpha expects net income to grow 9% to $140 million, and dividends also are expected to increase 8% to $2.50 per share and to continue growing at that rate for the foreseeable future. The current market value of Alpha's stock is $65. If the firm has a marginal tax rate of 25%, what is its weighted cost of capital for the coming year?

Loyola Corporation has a target capital structure of 25% bond financing, 20% preferred stock financing, and 55% common equity financing.  Loyola forecasts it will retain $1,000,000 of new earnings in the coming year.  Where is the break in Loyola's cost of capital schedule?

Kahn Inc. has a target capital structure of 60% common equity and 40% debt to fund its $11 billion in operating assets. Furthermore, Kahn Inc. has a WACC of 15%, a before - tax cost of debt of 10%, and a tax rate of 25%. The company's retained earnings are adequate to provide the common equity portion of its capital budget. Its expected dividend next year (D1) is $4, and the current stock price is $30. What is the company's expected growth rate? Do not round intermediate calculations. Round your answer to two decimal places. If the firm's net income is expected to be $1.4 billion, what portion of its net income is the firm expected to pay out as dividends? Do not round intermediate calculations. Round your answer to two decimal places. (Hint: Refer to Equation below.) Growth rate = (1 - Payout ratio) ROE

Kahn Inc. has a target capital structure of 45% common equity and 55% debt to fund its $10 billion in operating assets. Furthermore, Kahn Inc. has a WACC of 12%, a before-tax cost of debt of 9%, and a tax rate of 25%. The company's retained earnings are adequate to provide the common equity portion of its capital budget. Its expected dividend next year (D1) is $3, and the current stock price is $33. What is the company's expected growth rate? Do not round intermediate calculations. Round your answer to two decimal places.   % If the firm's net income is expected to be $1.9 billion, what portion of its net income is the firm expected to pay out as dividends? Do not round intermediate calculations. Round your answer to two decimal places. (Hint: Refer to Equation below.) Growth rate = (1 - Payout ratio)ROE   %