1. Pfizer's market value of equity is $70 billion and its market value of debt is $100 billion. What percent of Pfizer's total capital consists of equity?

   a) 41.2% b)58.8%. c) 70.0%. d) 20.0%

2.

1. The market value of Charter Cruise Company's equity is $15 million and the market value of its debt is $5 million. If the required rate of return on the equity is 20 percent and that on its debt is 8 percent, calculate the company's cost of capital. (Assume no taxes.)

   a) 20 % b) 17%. c) 14%. d) 11%