Lannister Manufacturing has a target debt-equity ratio of 0.62. Its cost of equity is 16 percent, and its cost of debt is 11 percent. If the tax rate is 32 percent, what is the company's WACC?

Multiple Choice

• 12.74%

• 12.1%

• 10.72%

• 10.74%

• 13.38%

Stock in Daenerys Industries has a beta of 1.12. The market risk premium is 7.5 percent, and T-bills are currently yielding 5 percent. The company's most recent dividend was $2 per share, and dividends are expected to grow at a 5 percent annual rate indefinitely. If the stock sells for $33 per share, what is your best estimate of the company's cost of equity?

Multiple Choice

• 9.78%

• 13.4%

• 7.8%

• 12.38%