FNAN 522 Module 3
University Of Louisiana At Lafayette
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FNAN 522 Module 3 Homework - University of Louisiana, Lafayette . Questions & Answers.
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A company has a risk free rate of 3% and a risk 
premium of 6%. Its tax rate is 35%. What is the 
company's cost of debt? 
Select one: 
a. 3.90% 
b. 2.10% 
c. 3.15% 
d. 5.85% 
A company is thinking of issuing more 
common stock. Its stock's current market 
price is $50 a share with an expected 
dividend annual one year from today of $3 
a share. Dividends are expected to grow 
5% per year and there are no flotation 
costs. What is the company cost of new 
common stock? 
Select one: 
a. 11.00% ...
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