Q11. A company has $5 million in debt outstanding with a coupon rate of 12%. Currently the YTM on these bonds is 14%. If the tax rate is 40%, what is the after tax cost of debt?

A)   7.2%.

B)   8.4%.

C)   5.6%.

Q12. The expected annual dividend one year from today is $2.50 for a share of stock priced at $25. What is the cost of equity if the constant long-term growth in dividends is projected to be 8%?

A)   18%.

B)   19%.

C)   15%.

Q13. The cost of preferred stock is equal to the preferred stock dividend:

A)   divided by its par value.

B)   multiplied by the market price.

C)   divided by the market price.

Q14. The expected dividend one year from today is $2.50 for a share of stock priced at $22.50. The long-term growth in dividends is projected at 8%. The cost of common equity is closest to:

A)   15.6%.

B)   19.1%.

C)   18.0%.

Q15. A $100 par, 8% preferred stock is currently selling for $80. What is the cost of preferred equity?

A)   10.8%.

B)   8.0%.

C)   10.0%.

Thanks