8. A 20-year, 15% semiannual bond sells for $1,153.72. Whats yield to maturity, or return required from the investors; OR, what is the cost the firm pays to the bond holders? Face value is $1000. The firms tax rate is 40%. (Hint: Chapter 9. This is debt, so need to calculate AFTERTAX cost of debt). Calculate the yield first (I/YR)).

a. 8.991% b. 7.708% c. 6.258% d. 2.664% e. 3.917%

9. CDK, Ind. just paid a dividend of $6 per share. It is anticipated that the company will maintain a 6.5 percent annual dividend growth rate. If a share of CDK, Inc. currently sells for $35.50 per share, what is required rate of return (Cost of equity)?

a. 24.5% b. 31.9% c. 62.7% d. 10.78% e. 13.22%

10. Angelo Company has a capital structure of 35% debt, 10% preferred, and 55% common equity. The interest rate on new debt is 7.50%, the yield on the preferred is 9.50%, the cost of common from reinvested earnings is 10%, and the tax rate is 40%. The firm will not be issuing any new common stock. What is Avery's WACC?

a. 7.661% b. 5.958% c. 7.118% d. 8.025% e. 8.915%