10. A 15-year, 10% semiannual bond sells for $1,153.72. Whats yield to maturity, or return required from the investors; OR, what is the cost the firm pays to the bond holders? Face value is $1000. The firms tax rate is 40%. (Hint: Chapter 9. This is debt, so need to calculate AFTERTAX cost of debt). Calculate the yield first (I/YR)).

a. 8.20% b. 10% c. 5% d. 4.92%

11. CDK, Ind. just paid a dividend of $4 per share. It is anticipated that the company will maintain a 4.5 percent annual dividend growth rate. If a share of CDK, Inc. currently sells for $35.50 per share, what is required rate of return (Cost of equity)?

a. 17.89% b. 16.27% c. 15.67%

12. Angelo Company has a capital structure of 35% debt, 10% preferred, and 55% common equity. The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of common from reinvested earnings is 11.25%, and the tax rate is 40%. The firm will not be issuing any new common stock. What is Avery's WACC?

a. 8.15% b. 8.48% c. 8.82%