18. You would like to create a portfolio that is equally invested in a risk-free asset and two stocks. One stock has a beta of 1.2. What does the beta of the second stock have to be if you want the portfolio to be equally as risky as the overall market?

20. Judy's Boutique just paid an annual dividend of $3 on its common stock. The firm increases its dividend by 5 percent annually. What is the rate of return on this stock if the current stock price is $38.20 a share?

21. Electronic Products has 5000 bonds outstanding that are currently quoted at 105. The bonds mature in 11 years and carry a 9 percent annual coupon. What is the firm's aftertax cost of debt if the applicable tax rate is 30 percent?

22. Country Kitchen's cost of equity is 10 percent and its aftertax cost of debt is 6.9 percent. What is the firm's weighted average cost of capital if its debt-equity ratio is 0.8 and the tax rate is 30 percent?