1. Whitewall Tire Co. just paid an annual dividend of $1.70 on its common shares. If Whitewall is expected to increase its annual dividend by 6.10 percent per year into the foreseeable future and the current price of Whitewalls common shares is $21.70, what is the cost of common stock for Whitewall?

2.Fjord Luxury Liners has preferred shares outstanding that pay an annual dividend equal to $10 per year. If the current price of Fjord preferred shares is $101.10, what is the after-tax cost of preferred stock for Fjord?

3.Capital Co. has a capital structure, based on current market values, that consists of 33 percent debt, 4 percent preferred stock, and 63 percent common stock. If the returns required by investors are 12 percent, 12 percent, and 15 percent for the debt, preferred stock, and common stock, respectively, what is Capitals after-tax WACC? Assume that the firms marginal tax rate is 40 percent.

4.Seerex Wok Co. is expected to pay a dividend of $1.50 one year from today on its common shares. That dividend is expected to increase by 8.10 percent every year thereafter. If the price of Seerex common stock is $16.71, what is the cost of its common equity capital?

5.You know that the return of Momentum Cyclicals common shares is 1.5 times as sensitive to macroeconomic information as the return of the market. If the risk-free rate of return is 3.10 percent and market risk premium is 5.71 percent, what is Momentum Cyclicals cost of common equity capital?