1. The Holmes Company's currently outstanding bonds have a 7% coupon and an 11% yield to maturity. Holmes believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 25%, what is Holmes' after-tax cost of debt? Round your answer to two decimal places.

_____%

2) Pearson Motors has a target capital structure of 30% debt and 70% common equity, with no preferred stock. The yieid to maturity on the company's outstanding bonds is 11%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 11.00%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.

_____%

3) The Evanec Company's next expected dividend, D1, is $3.44; its growth rate is 4%; and its common stock now sells for $34.00. New stock (external equity) can be sold to net $32.30 per share.

a. What is Evane's cost of retained earnings, rs? Do not round intermediate calculations. Round your answer to two decimal places.

Rs =____%

b. What is Evanec's percentage flotation cost, F? Round your answer to two decimal places.

F= ___%

c. What is Evanec's cost of new common stock, re? Do not round intermediate calculations. Round your answer to two decimal places.

Re= ____%

4) Palencia Paints Corporation has a target capital structure of 30% debt and 70% common equity, with no preferred stock. Its before-tax cost of debt is 10%, and its marginal tax rate is 25%. The current stock price is Po = $22.00. The last dividend was Do = $2.25, and it is expected to grow at an 8% constant rate. What is its cost of common equity and its WACC? Do not round intermediate calculations. Round your answers to two decimal places.

Rs= ____%

WACC =___%