1. A stock has an expected return of 11 percent, its beta is 1.25, and the expected return on the market is 10 percent. What must the risk-free rate be? (Do not round your intermediate calculations.)
6.00%
6.24%
5.70%
6.30%
-1.50%
2. Hunter Manufacturing Inc.'s December 31, 2014 balance sheet showed total common equity of $2,050,000 and 180,000 shares of stock outstanding. During 2015, Hunter had $250,000 of net income, and it paid out $100,000 as dividends. What was the book value per share at 12/31/2015, assuming that Hunter neither issued nor retired any common stock during 2015?
a. $11.22
b. $14.22
c. $15.22
d. $12.22
e. $13.22