QUESTION 15

A firm currently has debt outstanding with a coupon rate of 8 percent. The firm is obtaining subsidized financing for a new project at a rate of 5.5 percent. The current market rate is 5.8 percent. What discount rate should be used to compute the NPV of the loan?

5.8

5.5

8

7

QUESTION 10

Lake Co. has paid a dividend $3 per share out of earnings of $5 per share. If the book value per share is $40, what is the expected growth rate in dividends?

	A.	7.5%
	B.	8%
	C.	12.5%
	D.	5%