1- Compute the required values under the following circumstances: (Do not round intermediate calculations. Round the final answers to 2 decimal places.)

a. D₁ = $5.00; P₀ = $70; g = 8%; F = $7.00.

Ke	%
Kn	%

b. D₁ = $0.22; P₀ = $28; g = 7%; F = $2.50.

Ke	%
Kn	%

c. E₁ (earnings at the end of period one) = $7; payout ratio equals 40 percent; P₀ = $30; g = 6.0%; F = $2.2.

D1	$
Ke	%
Kn	%

d. D₀ (dividend at the beginning of the first period) = $6; growth rate for dividends and earnings (g) = 7%; P₀ = $60; F = $3.00.

D1	$
Ke	%
Kn	%

2- Given the following information.

Percent of capital structure:
Debt		15	%
Preferred stock		10
Common equity		75
Additional information:
Bond coupon rate		5	%
Bond yield		3	%
Dividend, expected common		$2.00
Dividend, preferred		$9.00
Price, common		$45.00
Price, preferred		$130.00
Flotation cost, preferred		$2.20
Corporate growth rate		7	%
Corporate tax rate		35	%

Calculate the weighted average cost of capital for Genex Corporation. Line up the calculations in the order shown in Table 11-1. (Do not round your intermediate calculations and round your final answers to 2 decimal places.)

	Weighted Cost
Debt (Kd)	%
Preferred stock (Kp)
Common equity (Ke)
Weighted average cost of capital (Ka)	%