Shares in Coastal Road Industries has a beta of 0.97. The market risk premium is 10 % while T-bills are currently yielding 5.5 %. Country Road's most recent dividend was $1.70 per share, and dividends are expected to grow at a 7 % annual rate indefinitely. The share sells for $32 a share. What is the estimated cost of equity using the average of the (1) CAPM approach and the (2) dividend discount approach?

Titan Mining has 14 million shares of ordinary shares in issue, 900,000 shares of 9 % preference shares in issue and 210,000 ten % semi-annual debentures in issue, par value $1,000 each. The ordinary shares currently sells for $34 per share and has a beta of 1.15, the preference shares currently sells for $80 per share, and the debentures have 17 years to maturity and sell for 91 % of par. The market risk premium is 11.5 %, government bonds are yielding 7.5 %, and the firm's tax rate is 32 %. What discount rate should the firm apply to a new project's cash flows if the project has the same risk as the firm's typical project?

Which one of the following statements is correct for a firm that uses debt in its capital structure?

Mulliti Corporation has a target capital structure of 41 % ordinary shares, 4 % preference shares, and 55 % debt. Its cost of equity is 19 %, the cost of preference shares is 6.5 %, and the pre-tax cost of debt is 7.5 %. What is the firm's WACC given a tax rate of 34 %?

Eatsumore Manufacturing has a target debt-equity ratio of 0.5. Its cost of equity is 15 %, and its cost of debt is 11 %. What is the firm's WACC given a tax rate of 31 %?