FIN101

Q1)

What is cost of equity capital of a firm if the market risk premium is 8%, the risk-free rate return is 5.4% and a beta of 1.2?

	a.	14.5%
	b.	12.5%
	c.	13.5%
	d.	15%

Q2) A share of preferred stock has a 9 percent dividend rate, $100 stated value and a price of $62. What is the cost of this preferred stock?

	a.	15%
	b.	8%
	c.	7%
	d.	14.5%