1) Alloy Supply Co. has a new project that will require the company to borrow $3,000,000. Acme has made an agreement with three lenders for the needed financing. First National Bank will give $1,500,000 and wants 6% interest on the loan. Banner Bank will give $1,000,000 and wants 9% interest on the loan. Western National Bank will give $500,000 and wants 7% interest on the loan. What is the weighted average cost of capital to acquire the $3,000,000?

2) Dakota Drilling Inc. (DD) has a new project that will require the company to borrow $5,000,000. MM has made an agreement with three lenders for the needed financing. First National Bank will give $1,000,000 and wants 6% interest on the loan. Texas Bank will give $3,000,000 and wants 7% interest on the loan. Chase Bank will give $1,000,000 and wants 8% interest on the loan. What is the weighted average cost of capital for this $5,000,000?

3) Your firm has preferred stock outstanding that pays a current dividend of $3.00 per year and has a current price of $35.90. You anticipate that the economy will grow steadily at a rate of 2.00% per year for the foreseeable future. What is the market required rate of return on your firm's preferred stock?

4) Use the dividend growth model to determine the required rate of return for equity. Yesterday your firm paid a dividend of $1.50 per share. Further, the recent stock price is $31.82 per share, and you anticipate a growth rate in dividends of 4.00% per year for the foreseeable future.

5) Lighting Electrics outstanding bond has a $1,000 maturity value and a 4.5% coupon rate of interest (paid semiannually). The bond, which was issued five years ago, matures in 10 years. If investors require a rate of return equal to 6% to invest in similar bonds, what is the current market value of Lightings bond?

6) Dcor Interiors has an outstanding bond that was issued 20 years ago. The bond has a $1,000 maturity value and 5.5% coupon rate of interest. Interest is paid semiannually. The bond which matures in five years, is currently selling for $1,022. What is the bonds yield to maturity?

7) Portland Brewery Inc. recently issued 30-year $1,000 face value, 12% annual coupon bonds. The market discount rate for this bond is only 7%. What is the current price of this bond?

8) Five years ago, Simpson Warehouses Inc. issued twenty-five-year 10% annual coupon bonds with a $1,000 face value each. Since then, interest rates in general have risen and the yield to maturity on the Thompson bonds is now 12%. Given this information, what is the price today for a Thompson Tarps bond?