1. Fred's Lawn and Garden's last dividend per share was $1.22. The stock sells for $19 per share, and the expected growth rate for the company is 11 %. Calculate the company's cost of equity.
2. National Bank just issued a new 30-year, non-callable bond at par. This bond requires a coupon rate of 6% with semiannual payments and has a par value of $1,000. The tax rate is 39%. What is the after-tax cost of debt?