How to apply grade to existing track.

How do you apply a grade to an existing piece of track?

I found the "apply grade to this spline endpoint" option but it is greyed out.

You need to select a segment (or several segments) that starts with that particular endpoint. You can then do one of two things:-

1: Enter a value in the Grade setting in the Tool Options Palette and hit the Enter key, or
2: Open the Context Menu for the endpoint and select the option Apply Grade to this Spline Endpoint to apply the current Grade setting

Addendum: Thanks for the question. I didn't realise that this aspect of spline construction was missing from the documentation Wiki Page How to Use S20 Tools. Now updated to include setting grades.