1. A company has 4,000 in debt and 9,000 in equity. They had net income of $1,000 and paid $600 in dividends. What is their sustainable growth rate?

a) 4.44%                      b) 5.71%                      c) 6.47%                      d) 7.83%

2. A company has 4,000 in debt and 9,000 in equity. They had net income of $1,000 and paid $600 in dividends. How much can their retained earnings breakpoint?

a) $578                        b) $729                                    c) $963                                    d) $1,384

3. A company has just paid a dividend of $3 and is expected to grow 3% per year. If the stock price is $60 and flotation costs are 10% for issuing stock, what is the cost of new equity?

a) 8.72%                      b) 9.31%                      c) 12.46%                    d) 15.71%