1. Stadford, Inc. is financed with 40 percent debt and 60 percent equity. This mixture of debt and equity is referred to as the firm's: A. Capital structure. B. Capital budget. C. Asset allocation. D. Working capital. E. Risk structure. 2. Big Bird & Company just paid their annual dividend in the amount of $1.20 a share. This dividend is expected to increase by 3 percent annually. The company's stock is currently selling for $26.40 per share. What is the cost of equity? A. 4.68 percent B. 4.79 percent C. 7.55 percent D. 7.68 percent 3. One year ago, you purchased a stock at a price of $36.24 a share. You received an annual dividend of $1.80 a share and you sold the stock today for $32.12 a share. What was your capital gains rate of return? A. -11.28 percent B.-11.37 percent C.-12.76 percent D.-12.83 percent 4. You purchased 100 shares of Resorts, Inc. stock at a price of $35.87 a share exactly one year ago. You have received dividends totaling $1.05 a share. Today, you sold your shares at a price of $46.26 a share. What is your total dollar return on this investment? A. $10.39 B. $11.44 C. $1,039 D. $1,144 5. Gertrude Carter and Co. has an outstanding loan that calls for equal annual payments of $14,903 over the 10-year life of the loan. The original loan amount was $100,000 at an APR of 8 percent. How much of the third payment is interest? A. $6,130.42 B. $6,207.21 C. $6,851.26 D. $7,447.76 E. $8,051.66