1. The company X has a Beta of 1.05, the current risk-free rate is 1% and a survey of stock market strategists, expect the market to return 10% this year. What is your estimate of the cost of equity with these assumptions?
2. Which of the following bonds typically has the highest yield to maturity?
A. A 3-monthT-bill.
B. A 10-year T-note
C. A 10-year corporate bond with AA credit rating
D. A 10-year corporate bond with CCC credit rating