1. Moerdyk Company's stock has a beta of 1.40, the risk-free rate is 4.25%, and the market risk premium is 5.50%. What is the firm's required rate of return?
2. A firm wishes to maintain a growth rate of 10 percent and a dividend payout ratio of 68 percent. The ratio of total assets to sales is constant at 1, and the profit margin is 9.6 percent. If the firm also wishes to maintain a constant debt-equity ratio, what must it be?