1. Midwest Digital Corporation has an expected return of 10 percent, the risk-free rate is 1 percent, and the markets expected risk premium is 5 percent. What must the beta of Midwest Digital be? Hint: CAPM.

Group of answer choices

The Beta = 1.6

The Beta = 1.3

The Beta = 1.8

The Beta = 1.1

2. What is the Tyco Corporations cost of equity capital? Tycos common stock has a beta of .90. The stock price of Tyco is $22. Assume the risk-free rate is 1 percent and the expected return on the market is 7 percent.

Group of answer choices

8.2%

6.4%

9.1%

5.2%

3. The US Bancorp has an issue of preferred stock with an $8 stated annual dividend that just sold for $97 per share. What is the US Bancorps cost of preferred stock?

Group of answer choices

10.37%

7.32%

8.25%

9.37%