1. Burnwood Tech plans to issue some $50 par preferred stock with a 5% dividend. A similar stock is selling on the market for $65. Burnwood must pay flotation costs of 6% of the issue price. What is the cost of the preferred stock? Round your answer to two decimal places.

2. Summerdahl Resort's common stock is currently trading at $35 a share. The stock is expected to pay a dividend of $3.00 a share at the end of the year (D₁ = $3.00), and the dividend is expected to grow at a constant rate of 5% a year. What is the cost of common equity? Round your answer to two decimal places.

3. AA Corporation's stock has a beta of 0.7. The risk-free rate is 6%, and the expected return on the market is 13%. What is the required rate of return on AA's stock? Do not round intermediate calculations. Round your answer to one decimal place.

4. Your investment club has only two stocks in its portfolio. $20,000 is invested in a stock with a beta of 0.6, and $30,000 is invested in a stock with a beta of 2.1. What is the portfolio's beta? Do not round intermediate calculations. Round your answer to two decimal places.