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6. Assuming the CAPM or one-factor model holds, what is the cost of equity for a firm if the firm's equity has a beta of 1.2, the risk-free rate of return is 2%, the expected return on the market is 9%, and the return to the company's debt is 7%?
7. Nelson Company had equity accounts in 2000 as follows: Common Stock ($1 Par Value) $120,000 Retained Earnings 32,000 Total Shareholder's Equity $152,000 Projected income is $150,000 and the dividend per share to be paid immediately is 40%. What will the ending retained earnings account be?
8. Holden Bicycles has 1,000 shares outstanding each with a par value of $0.10 each. If they are sold to shareholders at $10 each, what would the capital surplus be?