Your company's stock sells for $50 per share, its last dividend (Do) was $2.00, its growth rate is a constant 5 percent, and the company will incur a flotation cost of 15 percent if it sells new common stock. What is the firm's cost of new equity, re? 1) 9.20% 2) 9.94% 3) 10.50% 4) 11.75% RealTime Inc. considers purchasing of a new machine that costs $40,000 and requires an increase in net operating working capital of $2,000 at the time of purchase. What is the net investment required at t = 0? 1) $42,000 2) $40,000 3) $38,600 4) $37,600 The betas of Stock A, Stock B, and Stock C are 1.6, 1.2, and 0.8 respectively. If you invest 50% in Stock A, 25% each in Stock B and Stock C, what is the beta of your investment? 1) 1.05 2) 1.15 3) 1.30 4) 1.50 The Morton Company's currently outstanding 10% coupon bonds have a yield to maturity of 12%. If the company's marginal tax rate is 35%, what is its after-tax cost of debt? 1) 7.8% 2) 8.5% 3) 6.5% 4) 9.3%