3. laramie trucking's ceo is considering a change to the company's capital structure, which currently consists of 25% debt and 75% equity. the cfo believes the firm should use more debt, but the ceo is reluctant to increase the debt ratio. the risk-free rate, rrf, is 5.0%, the market risk premium, rpm, is 6.0%, and the firm's tax rate is 40%. currently, the cost of equity, rs, is 11.5% as determined by the capm. what would be the estimated cost of equity if the firm used 60% debt? (hint: you must first find the current beta and then the unlevered beta to solve the problem.)

Max fischer is a beekeeper. his annual group insurance costs 11,700. his employer pays 60% of the cost. how much does max pay semimonthly for it?

In the fall, jay thompson decided to live in a university dormitory. he signed a dorm contract under which he was obligated to pay the room rent for the full college year. one clause stated that if he moved out during the year, he could sell his dorm contract to another student who would move into the dormitory as his replacement. the dorm cost was $5000 for the two semesters, which jay had already paid a month after he moved into the dorm, he decided he would prefer to live in an apartment. that week, after some searching for a replacement to fulfill his dorm contract, jay had two offers. one student offered to move in immediately and to pay jay $300 per month for the eight remaining months of the school year. a second student offered to move in the second semester and pay $2500 to jay. jay estimates his food cost per month is $500 if he lives in the dorm and $450 if he lives in an apartment with three other students. his share of the apartment rent and utilities will be $404 per month. assume each semester is 4.5 months long. disregard the small differences in the timing of the disbursements or receipts. what is the cost of the cheapest alternative?

Aborrower takes out a 30-year adjustable rate mortgage loan for $200,000 with monthly payments. the first two years of the loan have a "teaser" rate of 4%, after that, the rate can reset with a 5% annual payment cap. on the reset date, the composite rate is 6%. what would the year 3 monthly payment be?