O'Brien Inc. has the following data: rRF = 5.00%; RPM = 6.00%; and b = 1.50. What is the firm's cost of equity from retained earnings based on the CAPM?

10.92%

12.46%

14.98%

15.54%

14.00%

Trahan Lumber Company hired you to help estimate its cost of capital. You obtained the following data: D1 = $1.25; P0 = $20.00; g = 5.00% (constant); and F = 6.00%. What is the cost of equity raised by selling new common stock?

13.98%

11.65%

12.35%

11.07%

13.75%

Assume that Kish Inc. hired you as a consultant to help estimate its cost of capital. You have obtained the following data: D0 = $0.90; P0 = $47.50; and g = 7.00% (constant). Based on the DCF approach, what is the cost of equity from retained earnings?

10.11%

7.22%

11.28%

6.95%

9.03%

Sorensen Systems Inc. is expected to pay a $2.50 dividend at year end (D1 = $2.50), the dividend is expected to grow at a constant rate of 5.50% a year, and the common stock currently sells for $87.50 a share. The before-tax cost of debt is 7.50%, and the tax rate is 25%. The target capital structure consists of 45% debt and 55% common equity. What is the companys WACC if all the equity used is from retained earnings?

5.69%

6.62%

7.35%

7.13%

5.10%

Thanks!