1. Felicity properly excluded all foreign income on form 2555 in 2015. In 2016 she claimed the foreign tax credit on all her foreign income. What is the result of her choice in 2016?
2. LexCorp has a beta of 0.75, a stock price of $42, and recently paid an annual dividend of $1.00 a share. The dividend growth rate is 5 percent. The market has a 14 percent rate of return and a risk premium of 11.40 percent. What is the firm's average cost of equity?