1. What are the strengths and weaknesses of the various capital budgeting/investment analysis tools? Which methodology do you prefer? Why? What are the assumptions of each methodology? How could you improve each one to make it more useful?
2. An issue of common stock is selling for $57.10. The year end dividend is expected to be $3.35 assuming a constant growth rate of 5%. What is the required rate of return? (Round your answer to 1 decimal place.) 12.9, 11.4, 10.9, 10.4
3. The coupon rate on a debt issue is 7%. If the yield to maturity on the debt is 10%, what is the after-tax cost of debt in the weighted average cost of capital if the firm's tax rate is 40%? (Round your answer to 2 decimal places.) 4.65% 7.35% 6.00% 8.15%.