1.) Your estimate of the market risk premium is 8%. The risk-free rate of return is 1% and General Motors has a beta of 1.98. What is General Motors' cost of equity capital?

2.) If flotation cost is 1%, what is the cost of preferred stock that sells for $84 per share and has a yield of 6.63%, and a face value of $100?

3.) IBM expects to pay a dividend of $6 next year and expects these dividends to grow at 3.73% a year. The price of IBM is $80 per share. What is IBM's cost of equity capital?