4. A stock has an expected return of 15%, its beta is 1.11, and the risk-free rate is 5%. What must the expected return on the market be?

A. 10% B. 11% C. 12% D. 13% E. 14%

5. The market price of a bond is $686.08, it has 16 years to maturity, a $1000 face value, and pays an annual coupon of $100. What is the cost of debt?

A. 13.18% B. 14.26% C. 15.37% D. 16.11% E. 17.43%

6. The market value of May East Enterprises' stock is $200 million and the total market value of the firm is $350 million. The cost of equity is 18%, the cost of debt is 8%, and the tax rate is 39%. Assuming there is only debt and common equity outstanding, what is the firm's WACC?

A. 11.4% B. 13.7% C. 13.0% D. 12.4% E. 14.7%

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