Fast Moving Services Inc.s cost of equity is 11.80 percent. The risk-free rate of return is 1.30 percent, and the expected market return is 13.70 percent. What is the firms beta?

1. 0.61
2. 0.72
3. 0.85
4. 0.94
5. 1.08

Premier Wood Finishes just paid its annual dividend of $1.35 per share, which it expects to increase by 2 percent annually. Its stock is currently priced at $38.75 per share. The firm has a beta of 0.88, and the market has an expected return of 7.2 percent rate of return and a risk-free rate of return of 2.5 percent. What is the firms average cost of equity?

1. 5.55 percent
2. 6.09 percent
3. 6.31 percent
4. 6.64 percent
5. 6.89 percent