Question 1: "What is the after tax cost of debt on a $500,000 loan given a 7% interest rate and 35% tax bracket?"
- "$22,750 "
- 2.45%
- 4.55%
- "$35,000
Question 2: You are considering a new investment. The rate on T-bills is 3.3% and the return on the S&P 500 is 10.5%. You have measured the non-diversifiable risk of the investment you are considering to be .7. What rate of return will you require on the investment?
- 5.04%
- 5.28%
- 8.34%
- 13.80%
- 2.35%