1) Hometown Industries has paid annual dividends of $2

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1) Hometown Industries has paid annual dividends of $2.00, $2.08, $2.15,

and $2.25 per share over the last four years, respectively. The stock is currently selling for $46.80 a share. What is this firm's cost of equity?

2) Nexum Inc. has a target debt-equity ratio of 1.25. Its WACC is 9.2%,

and the tax rate is 35%. If Nexum's cost of equity is 14%, what is its pre-tax cost of debt?

 

3) The difference between the privileges available to the equity shareholders and preferences shareholders?

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