Porsche stock sells for $50 per share, its first-year dividend will be $3.00, 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?

a. 9.20%

b. 9.94%

c. 12.05%

d. 11.75%

e. 12.40%

If the economy booms, Walmart's stock is expected to return 19 percent. If the economy falls into a recession, the stock's return is projected at 5 percent. The probability of a boom is 80 percent while the probability of a recession is 20 percent. What is the variance of the returns on this stock? A..003136 b..006727 c..009864 d..010192 e..013328