1. Yes They Can, Inc. has a bond issue outstanding with a $1,000 par value and a maturity of 22 years. The annual coupon rate is 20.0% with quarterly coupon payments. The bonds are currently selling for $1,147. The bonds may be called in 6 years for 120.0% of par. What is the quoted annual yield-to-call for these bonds?

	19.64%
	17.88%
	18.18%
	4.35%
	17.38%

2. Marginal Incorporated (MI) has determined that its before-tax cost of debt is 9.0%. Its cost of preferred stock is 13.0%. Its cost of internal equity is 17.0%, and its cost of external equity is 22.0%. Currently, the firm's capital structure has $310 million of debt, $60 million of preferred stock, and $130 million of common equity. The firm's marginal tax rate is 45%. The firm is currently making projections for the next period. Its managers have determined that the firm should have $97 million available from retained earnings for investment purposes next period. What is the firm's marginal cost of capital at a total investment level of $466 million?

	9.05%
	10.35%
	9.70%
	12.86%
	11.56%