QUESTION 1

Assume that Kish Inc. hired you as a consultant to help estimate its cost of common equity. You have obtained the following data: D₀ = $0.90; P₀ = $27.50; and g = 7.00% (constant). Based on the DCF approach, what is the cost of common equity?

		9.29%
		9.68%
		10.08%
		10.50%
		10.92%

QUESTION 2

Hindelang Inc. is considering a project that has the following cash flow and WACC data. What is the project's MIRR? Note that a project's MIRR can be less than the WACC (and even negative), in which case it will be rejected.

WACC:	12.25%
Year	0	1	2	3	4
Cash flows	-$850	$300	$320	$340	$360

		13.42%
		14.91%
		16.56%
		18.22%
		20.04%