12) Jaynestown Corp is currently priced at 25.000 per share. They paid their annual of They have been experiencing growth just continue. What is the firm's in dividends of 2.5% and expect this to a) 4.00% cost of equity? dividend b) 7.58% c) 9.06% d) 10.02% e) 12.40% 13) The expected market rate of return is 14%, and the risk free rate is 4%. Stock A has a beta of 1.2. If the stock is currently priced to yield a return of 15% (expected return), then: a) The stock is overpriced b) The stock is underpriced c) The stock lies on the SML d) The stock lies above the SML e) The stock is fairly priced Use the following data for the next 5 questions: 50,000 bonds with a 5.0% coupon rate, Debt payable annually, 15 years to maturity, selling at $1.050 per bond. Common Stock 1,000,000 shares of common stock outstanding. The stock sells for a price of $65 per share and has a beta of 1.1 Preferred Stock 150,000 preferred shares outstanding, currently trading at $90 pershare; with an annual dividend payment of $6.50 The market risk premium is 7% and the risk Market free rate is 2.5% 35% Tax Rate 14) The company's cost of common stock is: a) 8.50% b) 9.42%. c) 12.18% d) 10.20% e) 11.50%