Given the following common stock information for Huntington Power Co., find the cost of common equity.

Common Stock: selling at $15 a share. Its recent dividend was $1.06 and dividends are expected to grow at 2% rate. Floatation cost is 10% of the market price.

	a.	10.00%
	b.	12.48%
	c.	11.25%
	d.	13.95%

The weighted average cost of capital for a firm:

	a.	is the minimum rate which the firm should require on any projects it undertakes regardless of the risk
	b.	should not be applied to projects/investments that has different risk level than the overall firm
	c.	is the discount rate which the firm should apply to all of the projects it undertakes
	d.	is the rate that the firm should expect to pay on its next bond issue

McGilla has decided to sell a new line of golf clubs. The clubs will sell for $1,600 per set (i.e., per unit), have a variable cost of $700 per set and fixed costs each year will be $600,000. The plant and equipment required will cost $1.2 million and will be depreciated straight-line to zero book value over 8-year life. If the required return on the project is 14 percent and tax rate is zero (i.e.,ignore taxes):

Find the firms operating cash flow (OCF) if the firm just breaks-even on an accounting basis

	a.	$150,000
	b.	$200,000
	c.	$110,000
	d.	$170,000

Given the following preferred stock information for Huntington Power Co., find the cost of preferred stock.

Preferred Stock: selling for $98. Floatation cost is $2 and dividends are $6 a share.

	a.	5.89%
	b.	5.18%
	c.	7.22%
	d.	6.25%