1. A stock is trading for 24, and just paid a dividend of 1.3 which is expected to grow at a fraction 0.18 per year. If Goldman Sacs charges a fraction 0.17 as a flotation cost, what is the required rate of return on a new stock issue?
2. Consider a company subject to a corporate tax rate of 0.2. If the company has a debt ratio of 0.0, and an unleveraged beta of 0.5, what is the company's leveraged beta?
3. You are currently 30 years old and would like to retire at 65. You currently have no debt or savings. If you start making monthly deposits tomorrow in an index fund of the Wilshire 5000 and assume it will return 8% compounded monthly, how much must you save to retire with $1.5 million?