1. Summerdahl Resort's common stock is currently trading at $21 a share. The stock is expected to pay a dividend of $2.00 a share at the end of the year (D₁ = $2.00), and the dividend is expected to grow at a constant rate of 4% a year. What is the cost of common equity? Round your answer to two decimal places.

2. Shi Import-Export's balance sheet shows $300 million in debt, $50 million in preferred stock, and $250 million in total common equity. Shi's tax rate is 25%, r_d = 6%, r_ps = 5.9%, and r_s = 11%. If Shi has a target capital structure of 30% debt, 5% preferred stock, and 65% common stock, what is its WACC? Round your answer to two decimal places.

3. David Ortiz Motors has a target capital structure of 40% debt and 60% equity. The yield to maturity on the company's outstanding bonds is 9%, and the company's tax rate is 25%. Ortiz's CFO has calculated the company's WACC as 10.5%. What is the company's cost of equity capital? Round your answer to the nearest whole number.