1. Carlson Companies is calculating its overall cost of capital. Carlson has outstanding bonds with a 6% annual coupon, and a yield to maturity of 5%. Given a marginal tax rate of 35%, what is Carlsons after-tax cost of debt?

2.Jones Plastics EPS was $4.77 in 2017 and 3.40 in 2012. Growth has been steady over these past 5 years, and is expected to remain so. Jones pays out 40% of its earnings as dividends. Given a stock price of $36.40, what is Jones cost of equity?