1. MNO's capital structure includes bonds, preferred stock, and common stock. The target capital structure calls for 58 percent common stock, 12 percent preferred stock, and the remainder as bonds. The company's bonds have a yield to maturity of 6.7 percent. The company's preferred stock, which sells for $58.64 per share, pays an annual dividend of $6.79. The market risk premium for the average common stock is 10.5 percent and the risk-free rate is 2.5 percent. MNO stock has a beta of 1.6. If MNO's marginal tax rate is 40 percent, then what is MNO's weighted average cost of capital? (Show your answer in decimal for to three places, e.g., 12.3% would be entered as 0.123)

2. ABC expects to pay a dividend one year from now of $0.59. The dividend exhibits constant growth of 10.8%, and the current price of the stock is $94.28. Given all of this information, what is the expected rate of return for this stock under the Discounted Cash Flow model? (Show your answer as a decimal to four places, e.g., if you got 12.34% then input 0.1234)

3. XYZ common stock is expected to pay a dividend of $1.1 next year, and that dividend grows at a constant rate of 14.2. If the current price of XYZ common stock is $172.03, then what is the expected rate of return for this stock, based on the Discounted Cash Flow model? (Show your answer in DECIMAL FORM to three decimals, e.g., 12.3% would be entered as 0.123).

4. ABC has a beta of 0.69. The expected return for the S&P 500 stock index is 10.5 percent and U.S. Treasuries are expected to yield 3.6 percent. Based on the Capital Asset Pricing Model (CAPM), what is ABC's expected rate of return? (show your answer in decimal form to four places)

5. If the market risk premium is 17 percent and the risk-free rate is 3.7, what is the expected rate of return for a stock with a beta of 1.38 under the Capital Asset Pricing Model (CAPM)? (show your answer in decimal form to four places)

6. Fredex has a beta of 1.86 and a capital structure that consists of $46 million of interest bearing debt.and $51 million of common equity. Assuming a tax rate of 34 percent, what is Fredex's asset beta? Show your answer to two decimal places (e.g., 1.23)

7. BALLPARK has an asset (unlevered) beta of 0.91 and a capital structure that consists of $12 million of interest bearing debt.and $55 million of common equity. Assuming a tax rate of 35 percent, what is BALLPARK's equity (levered) beta? Show your answer to two decimal places (e.g., 1.23)