1. How much would you need to deposit in an account each month in order to have $40,000 in the account in 8 years? Assume the account earns 7% interest.
2. Company A has a beta of 0.80, while Company B's beta is 1.25. The required return on the stock market is 11.00%, and the risk-free rate is 4%. What is the difference between A's and B's required rates of return? Show work.
3. Compare and contrast new debt offerings to new offerings of equity in the form of stock. Specifically, be sure to comment on the direct and indirect costs of new public debt versus new public equity.