1. Assume that the risk-free rate is 4.5% and the required return on the market is 10%. What is the required rate of return on a stock with a beta of 2.1? Round your answer to two decimal places.
2. Kiss the Sky Enterprises has bonds on the market making annual payments, with 15 years to maturity, and selling for $870. At this price, the bonds yield 9.3 percent. What must the coupon rate be on the bonds?
3. Ngata Corp. issued 13-year bonds 2 years ago at a coupon rate of 10.4 percent. The bonds make semiannual payments. If these bonds currently sell for 102 percent of par value, what is the YTM?