1. The common stock of Schrodinger Feline Supplies has a beta of 1.26 and a standard deviation of 20.4 percent. The market rate of return is 14 percent and the risk-free rate is 4.8 percent. What is the cost of equity (in percents) for Schrodinger Feline Supplies?
2. Plato's Mills announced this morning that its next annual dividend will be decreased to $1.66 a share and that all future dividends will be decreased by an additional 3 percent annually. The stock price after the announcement was $22.61 a share. What is the firm's cost of equity capital (in percents)?