To estimate the cost of capital, you have been provided with the following data: r_RF = 5.00%; RP_M = 6.00%; and Beta = 1.0. Based on the CAPM approach, what is the cost of equity? ________

		5.0%
		6.0%
		10.4%
		11.0%

Assume that you have been provided with the following data: D₁ = $1.30; P₀ = $42.50; and g = 7.0% (constant). What is the cost of equity based on the Dividend Growth Model? ________

		9.52%
		10.06%
		11.41%
		12.0%

A firm has 35,000 shares of stock outstanding at a price per share of $26. The company has decided to repurchase $130,000 worth of shares. After the repurchase, there will be _____ shares outstanding.

		5,000 shares
		30,000 shares
		35,000 shares
		40,000 shares

Based on the information from the question above, what is new market price of the stock after the repurchase?

		$22.5 per share
		$26.0 per share
		$28.5 per share
		$30.3 per share

Based on the information from the two questions above, does the total market value of the common stock change after the stock repurchase?

		Yes
		No