1. Dindle Co. issued 10-year, 8 percent semiannual bonds. The bonds currently sell at 110 percent of face value (face value is $1,000). What is the firm's after-tax cost of debt if the tax rate is 20 percent?

   		6.62 percent
   		5.29 percent
   		3.31 percent
   		4.15 percent

2. The preferred stock of Eytelia Co. pays an annual dividend of $6.25 a share and sells for $90 a share. What is the firm's cost of preferred stock?

   		9.18 percent
   		11.15 percent
   		8.76 percent
   		6.94 percent

3. A stock has a beta of 1.4, an expected return of 17.2 percent, and lies on the security market line. A risk-free asset is yielding 3.2 percent. You want to create a portfolio that is comprised of the stock and the risk free and will have a portfolio beta of 0.6. What is the expected return on this portfolio?

   		10.41 percent
   		9.20 percent
   		12.33 percent
   		11.87 percent