1. LL Incorporated's currently outstanding 9% coupon bonds have a yield to maturity of 6.4%. LL believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 25%, what is LL's after-tax cost of debt? Round your answer to two decimal places.

2. Burnwood Tech plans to issue some $80 par preferred stock with a 8% dividend. A similar stock is selling on the market for $95. 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.

3. Summerdahl Resort's common stock is currently trading at $26 a share. The stock is expected to pay a dividend of $1.00 a share at the end of the year (D₁ = $1.00), 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.

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