Question: Suppose r RF = 5%, r M = 10%, and r A = 9%. Calculate Stock A's beta. Round your answer to one decimal place.

Suppose r_RF = 5%, r_M = 10%, and r_A = 9%.

Calculate Stock A's beta. Round your answer to one decimal place.
If Stock A's beta were 1.5, then what would be A's new required rate of return? Round your answer to one decimal place.

LL Incorporated's currently outstanding 10% coupon bonds have a yield to maturity of 7.8%. LL believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 25%, what is LL's after-tax cost of debt? Round your answer to two decimal places.

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