10.

Newtown Propane currently has only a wholesale division and uses only equity capital; however, it is considering creating marketing and retail divisions. Its beta is currently 1.5. The marketing division is expected to have a beta of 2.1, because it will have more risk than the firms wholesale division. The retail division is expected to have a beta of 0.6, because it will have less risk than the firms wholesale division. The risk-free rate is 3.1%, and the market risk premium is 6.1%. Based on this information, fill in the missing cost of capital information below:

Wholesale division _____

Marketing division _________

Retail division ___________

If 65% of Newtown Propanes total value ends up in the wholesale division, 25% in the marketing division, and 10% in the retail division, then its investors should require a return of ___________ .

7. Alpha Moose Transporters has a current stock price of $22.35 per share, and is expected to pay a per-share dividend of $2.03 at the end of next year. The companys earnings and dividends growth rate are expected to grow at the constant rate of 5.20% into the foreseeable future. If Alpha Moose expects to incur flotation costs of 5.00% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common stock (rounded to two decimal places) should be ____________