1.The market rate of return is 11.8 percent and the risk-free rate is 3.45 percent. Galaxy Co. has 36 percent more systematic risk than the overall market and has a dividend growth rate of 3.5 percent. What is the firm's cost of equity?

2.Mojo Mining has a bond outstanding that sells for $1,058 and matures in 24 years. The bond pays semiannual coupons and has a coupon rate of 6.02 percent. The par value is $1,000. If the company's tax rate is 35 percent, what is the aftertax cost of debt?