The Strong Co has invested 40 percent of the firm's assets in a project with a beta of 1 2 and the remaining assets in a project with a beta of 1 6 What is the beta of the firm A) 1 31 B) 1 44 C) 1 90 D) 1 72 Shell Drilling, Inc , has a beta of 1 40 and is trying to calculate its cost of equity capital If the risk free rate of return is 2 5 percent and the expected return on the market is 11 percent, then what is the firm's after tax cost of equity capital if the firm's marginal tax rate is 40 percent A) 15 6 B) 12 8 C) 9 1 D) 14 4 Sunny Resorts is redoing its golf course at a cost of $4,400 It expects to generate cash flows of $ 1,800, $2,200, and $2,600 over the next three years If the cost of capital for the firm is 12 percent, what is the NPV of this project A) $528 B) $630 C) $812 D) $252 Pure Water, Inc , is expected to pay a dividend of $1 24 one year from today If the firm's growth in dividends is expected to remain at a flat 5 percent forever and its marginal tax rate is 30 percent What is the cost of equity capital for Pure Water if the price of its common shares is currently $20 00 A) 9 91 B) 11 20 C) 8 80 D) 12 50 James Corporation has semiannual bonds outstanding with 10 years to maturity and are currently priced at $860 If the bonds have a coupon rate of 6 percent with semiannual coupon payments What is the after tax cost of debt for Bill if its marginal tax rate is 35 A) 6 67 B) 4 71 C) 7 37 D) 5 24 Devin Corporation has just paid a dividend of $1 80 The company has forecasted a growth rate of 7 percent for the next several years If the appropriate required rate is 12 percent, what is the current price of this stock A) $36 B) $23 C) $31 D) $56 Shine Inc , has found that its cost of common equity capital is 14 percent and its cost of debt capital is 9 percent If the firm is financed with $14,000 of common shares and $6,000 of debt, then what is the after tax weighted average cost of capital for Shine's if it is subject to a 25 percent marginal tax rate A) 10 04 B) 10 65 C) 9 91 D) 11 83

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The Strong Co. has invested 40 percent of the firm's assets in a project with a beta of 1.2 and the remaining assets in a

	The Strong Co. has invested 40 percent of the firm's assets in a project with a beta of 1.2 and the remaining assets in a project with a beta of 1.6. What is the beta of the firm?
			A)		1.31
			B)		1.44
			C)		1.90
			D)		1.72
Shell Drilling, Inc., has a beta of 1.40 and is trying to calculate its cost of equity capital. If the risk-free rate of return is 2.5 percent and the expected return on the market is 11 percent, then what is the firm's after-tax cost of equity capital if the firm's marginal tax rate is 40 percent?
		A)		15.6%
		B)		12.8%
		C)		9.1%
		D)		14.4%
Sunny Resorts is redoing its golf course at a cost of $4,400. It expects to generate cash flows of $ 1,800, $2,200, and $2,600 over the next three years. If the cost of capital for the firm is 12 percent, what is the NPV of this project?
		A)		$528
		B)		$630
		C)		$812
		D)		$252
Pure Water, Inc., is expected to pay a dividend of $1.24 one year from today. If the firm's growth in dividends is expected to remain at a flat 5 percent forever and its marginal tax rate is 30 percent. What is the cost of equity capital for Pure Water if the price of its common shares is currently $20.00?
		A)		9.91%
		B)		11.20%
		C)		8.80%
		D)		12.50%
James Corporation has semiannual bonds outstanding with 10 years to maturity and are currently priced at $860. If the bonds have a coupon rate of 6 percent with semiannual coupon payments. What is the after-tax cost of debt for Bill if its marginal tax rate is 35%?
		A)		6.67%
		B)		4.71%
		C)		7.37%
		D)		5.24%
Devin Corporation has just paid a dividend of $1.80. The company has forecasted a growth rate of 7 percent for the next several years. If the appropriate required rate is 12 percent, what is the current price of this stock?
		A)		$36
		B)		$23
		C)		$31
		D)		$56
Shine Inc., has found that its cost of common equity capital is 14 percent and its cost of debt capital is 9 percent. If the firm is financed with $14,000 of common shares and $6,000 of debt, then what is the after-tax weighted average cost of capital for Shine's if it is subject to a 25 percent marginal tax rate?
		A)		10.04%
		B)		10.65%
		C)		9.91%
		D)		11.83%