8-10 CAPM AND REQUIRED RETURN Beale Manufacturing Company has a beta of 1.1, and Foley Industries has a beta of 0.30. The required return on an index fund that holds the entire stock market is 11%. The risk-free rate of interest is 4.5%. By how much does Beales required return exceed Foleys required return?

8-11 AFTER-TAX COST OF DEBT The Holmes Companys currently outstanding bonds have an 8% coupon and a 10% yield to maturity. Holmes believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 40%, what is Holmes after-tax cost of debt?

***PLEASE*** explain and/or show work/formulas. I am trying to learn how to do these problems and get the correct answer.