What is the firms cost of equity is the firms marginal tax


1. What is the estimated value of a stock, which paid a $10 dividend D0 last year, expects dividends to grow at 5%, and requires a 20% return?

A. $66.67 B. $70.00 C. $73.50 D. $80.00.

2. UPS has a beta of 0.8. What is the firms cost of equity is the firms marginal tax rate is 35%, risk free rate is 3%, and the market risk premium is 9%?

A) 10.20%

B) 6.63%

C) 9.49%

D) 10.51%

E) 7.80%

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