1. Bermuda cruises issues only common stock and coupon bonds. The firm has a debt-equity ratio of .65. The cost of the equity is 11.1 percent and the pre-tax cost of debt is 6.4 percent. What is the capital structure weight of the firm's equity if the firms tax rate is 35 percent.
2. What was the rational for the investments selected?
3. DFA's small-stock funds managed to outperform small-stock indexes and most other small cap funds. What are the main reasons for them to be able to do so?