1. The Levign Inc. has been presented with an investment opportunity which will yield cash flows of $15,000 per year in Years 1 through 4, $17,500 per year in Years 5 through 9, and $25,000 in Year 10. This investment will cost the firm $75,000 today, and the firm's cost of capital is 10 percent. Assume cash flows occur evenly during the year, 1/365th each day. What is the payback period for this investment?

   		4.38
   		4.86
   		5.00
   		6.2

2. Levign Inc. wants to issue preferred stock at a price of $30 a share. The issue is expected to pay a annual dividend of $2 a share. The flotation cost on the issue will be 3%. What is companys cost of preferred stock?

		6.80%
		6.87%
		7.02%
		66.667%