1. Verizon currently pays $2.36 per year in dividends and is valued at $49.28 It's been growing at 3% per year in the last 4 years and is expected to continue to do so. What is VZ's cost of equity based on the dividend growth model?
2. The interest tax shield has no value for a firm when: A. the firm’s debt-equity ratio is exactly .5. B. the firm is unlevered. C. the firm’s debt-equity ratio is exactly equal to 1. D. shareholders fully utilize homemade leverage.