a) Booher Book Stores has a beta of 1.1. The yield on a 3-month T-bill is 4% and the yield on a 10-year T-bond is 7%. The market risk premium is 6.5%, and the return on an average stock in the market last year was 13%. What is the estimated cost of common equity using the CAPM? Round your answer to two decimal places.

b) Shi Import-Export's balance sheet shows $300 million in debt, $50 million in preferred stock, and $250 million in total common equity. Shi's tax rate is 25%, r_d = 8%, r_ps = 8.7%, and r_s = 14%. If Shi has a target capital structure of 30% debt, 5% preferred stock, and 65% common stock, what is its WACC? Round your answer to two decimal places.

c) Suppose r_RF = 3%, r_M = 8%, and r_A = 10%.

1. Calculate Stock A's beta. Round your answer to one decimal place.

2. If Stock A's beta were 1.7, then what would be A's new required rate of return? Round your answer to one decimal place.