1. The incremental income tax rate is the:
a) Difference between federal and state income tax rates
b) Difference between the individual and corporate tax rate
c) Increase this year in the tax rate over last year
d) None of these
2. A firm with a beta of 1.3 has a required rate of return of ____________ if the risk free rate is 5% and the market risk premium is 8%.
a. 8.00%
b. 8.90%
c. 14.50%
d. 15.40%