1. Fern has preferred stock selling for 93.4 percent of par that pays an 9.6 percent annual coupon. What would be Fern's component cost of preferred stock?
2. If the risk-free rate is 11.1 percent and the market risk premium is 6.2 percent, what is the required return for the market?
3. During a period of economic growth we would expect interest rate to increase, Why?