1. David Ortiz Motors has a target capital structure of 40 percent debt and 60 percent equity. The yield to maturity on the company’s outstanding bonds is 9 percent, and company’s tax rate is 40 percent. Ortiz’s CFO has calculated the company’s WACC as 9.96 percent. What is the company’s cost of equity? If the company will pay a constant annual dividend of $2.20 a share, what is the Ortiz’s current stock price?