1. American Electric Powers (AEP) reported sales are $17.5 million which investors expect to continue forever. The required return on AEPs unleveredequity is 13%, and it has a single B-rated bond issue with a pre-tax yield to maturity of 7%. The value of this bond issue, relative to the market value of AEPs equity, is 35%. Total operating costs are 60% of sales, and its tax rate is 40%. The required return on AEPs levered equity (we referred to this as " " in class) is closest to:

2. Consider the following sequence of dates:

June 5: You buy 3,000 shares of stock X

June 20: The company declares a $.30 per share dividend to shareholders of record.

July 9: You sell 400 shares of Stock X for $21 / share.

July 10: Dividend record date

July 18: You buy an additional 400 shares of Stock X at $22.50 / share

July 31: Dividend payment date

How much dividend income will you receive on July 31?