The total market value of the common stock of the Okefenokee Real Estate Company is $7.5 million, and the total value of its debt is $4.9 million. The treasurer estimates that the beta of the stock is currently 1.8 and that the expected risk premium on the market is 9%. The Treasury bill rate is 4%. Assume for simplicity that Okefenokee debt is risk-free and the company does not pay tax.

a. What is the required return on Okefenokee stock?

Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.

b. Estimate the company cost of capital.

Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.

c. What is the discount rate for an expansion of the company's present business?

Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.

d. Suppose the company wants to diversify into the manufacture of rose-colored spectacles. The beta of unleveraged optical manufacturers is 1.05. Estimate the required return on Okefenokee's new venture.

Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.