Question 13 1 pts Treasury bills currently have a return of 2.5% and the market risk premium is 7%. If a firm has a beta of 1, what is its cost of equity? What is the expected return according to the Capital Asset Pricing Model? (Here, the cost of equity and the CAPM expected return are, as is pretty much always the case, equal.) 7% O 9.5% O 12% 5% O 4.5% Question 14 1 pts A firm sold a 10-year bond issue 3 years ago. The bond has a 6.45% annual coupon and a $1,000 face value. If the current market price of the bond is $1,000 (the bond is selling for its face or par value) and the tax rate is 40%, what is the after-tax cost of debt? [Hint: Recall that the after-tax cost of debt = before-tax cost times (1 - tax rate).] = 3.87% 04.19% 0 4.95% O 4.41% 4.78% Question 21 1 pts Which of the following is generally considered the third riskiest? Treasury bill Long-term corporate bond Small-company stock large company stock O Long-term government bonds