6. Sue Smith received $100 dividends, which are subject to a gross-up factor of 45% and a dividend tax credit of 19% on taxable dividends. Sue Smith has a marginal federal tax rate of 29%. The dividend tax credit is. 1) $1333 11) $16.67 tu) $25.00 IV) $27.55 $29.00 7. a A new machine costing $50,000 qualifies for an investment tax credit of 20%. It replaces an existing machine with a market value of $5,000. If the existing machine has a book value of $8,000 and both machines belong to the same asset class, the incremental base for the calculation of capital cost allowance for the new machine is: 1 $32,000 $35,000 $42.000 iv) $45,000 $50,000 8. The expected market rate of return is 17% and the risk-free rate is 9% If the beta for a firm's stock is 0.85, then the cost of equity capital for the firm is. 1 9.00% 11 15.80% 111) 17.00% 1V) 23.45% 25.00% 9 A firm paid a dividend of $2 per share yesterday and expects the growth rate of dividends to be 5% in the future. If the stock beta is 125, the risk-free rate 4% and the return on the market portfolio 15%, the current price of the common share is: 1) 11 111) 1V) $10.67 $1127 $11.83 $15.68 $16.47 v) 10 Given a desired retum of 12%, the current price of a 10% perpetual bond, $1,000.00 par value, is 1 11) 111) 1v) $ 120.00. $ 833.33. $1,000.00 $1,100.00 $1,200.00