1. Spaghetti Extra recently paid a $2.10 annual dividend on its common stock and the dividend is expected to increase at an average rate of 2.25 percent per year. The stock is currently selling for $48.80 a share. What is the rate of return on Spaghetti Extra’s stock?

2. Porkers’ stock is currently selling for $12.50 a share. The company just announced that its annual dividend for this coming year will be $1.42 a share and that all future dividends are expected to increase by 2.75 percent annually. What is the rate of return on Porkers?

3. The preferred stock of The Greek Shop pays an annual dividend of $1.70 and sells for $18.28 a share. What is the rate of return on this security?

4. Titan Mining Corporation has 14 million shares of common stock outstanding, 900,000 shares of 9 percent preferred stock outstanding and 210,000 ten percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $34 per share and has a beta of 1.15, the preferred stock currently sells for $80 per share, and the bonds have 17 years to maturity and sell for 91 percent of par. The market risk premium is 11.5 percent, T-bills are yielding 7.5 percent, and the firm's tax rate is 32 percent. What is the weighted average cost of capital for Caps Limited?