d$.$ ROE: $38\mathrm{.}78\frac{\%}{?}$ EPS: $$3\mathrm{.}88$

The common stock of Modern Interiors has a beta of $1\mathrm{.}61$ and a standard deviation of $27\mathrm{.}4\%.$ The

market rate of return is $13\mathrm{.}2\%$ and the risk$-$free rate is $4\mathrm{.}8\%.$ What is the cost of equity for this firm?

a$.18\mathrm{.}23\%$

b$.19\mathrm{.}97\%$

c$.18\mathrm{.}32\%$

d$.19\mathrm{.}79\%$

Winter Wear has $6\%$ bonds outstanding that mature in $13$ years. The bonds pay interest semi$-$

annually. Currently, the bonds are quoted at $99\mathrm{.}30.$ What is the firms pre$-$tax cost of debt?

a$.6\mathrm{.}80\%$

b$.5\mathrm{.}97\%$

c$.5\mathrm{.}79\%$

d$.6\mathrm{.}08\%$

The General Store has a cost of equity of $15\mathrm{.}8\%,$ a pre$-$tax cost of debt of $7\mathrm{.}7\%,$ and a tax rate of

$32\%.$ What is the firms weighted average cost of capital if the debt$-$equity ratio is $0\mathrm{.}40?$

a$.14\mathrm{.}93\%$

b$.12\mathrm{.}87\%$

c$.12\mathrm{.}78\%$

d$.14\mathrm{.}39\%$