Yesterday was the last day of the financial year, Juggernaut Satellite Company made a profit of 10 million dollars in that year. The company also paid out 20% of its profits as dividends and plans to maintain its dividend payout ratio at 20%. The remaining 80% of the profits will be retained and used for other projects of the company. The company has 2 million outstanding common shares currently priced at $85 per share. The historical return on equity (ROE) is 16%, and it is expected to continue at that level in the future. What is the required rate of return for the company’s stock?

Shanken Group Corporation issued a 30-year bond with a 7% coupon rate, semi-annual payment, 7 years ago. The bond is currently selling at 108% of its face value. The company has a tax rate of 35%.

Mullineaux Group Corporation has a target capital structure of 70% common stock and 30% debt. Its cost of equity capital is 15%, and the cost of debt capital is 8%. The applicable tax rate is 35%. What is Mullineaux’s weighted average cost of capital?

Filer Manufacturing Company has 7.5 million outstanding common shares. The current stock price is $49 per share, and the book value per share is $4. Filer Manufacturing Company also has two outstanding bonds. The first has a face value of $60 million, a coupon rate of 7%, and sold at 93% of face value. The second has a face value of $50 million, a coupon rate of 6.5%, and sold at 96.5% of face value. The first bond will mature in 10 years, and the second bond will mature in 6 years.

Titan Mining Group has 8.5 million shares of common stock outstanding and 200,000 bonds with a face value of $1,000 and a coupon rate of 7.5%, paying interest semi-annually. The common stock is currently trading at $34 per share and has a beta value of 1.20. The bonds have 15 years until maturity and are selling for 93% of their face value. The market risk premium is 7%, the risk-free rate is 5%, and the corporate tax rate is 35%.