Day Medical Supply is trying to establish its optimal capital structure. Day's current beta is 1.5. Its current capital structure consists of 25% debt and 75% equity; however, the CEO believes the firm should use more debt. The risk-free rate, rf, is 5%, the market risk premium, RPM, is 6%, and the firm's tax rate is 40%. What would be Day's estimated cost of equity if it changed its capital structure to 50% debt and 50% equity

T-comm makes a variety of products. it is organized in two divisions, north and south. the managers for each division are paid, in part, based on the financial performance of their divisions. the south division normally sells to outside customers but, on occasion, also sells to the north division. when it does, corporate policy states that the price must be cost plus 20 percent to ensure a "fair" return to the selling division. south received an order from north for 300 units. south's planned output for the year had been 1,200 units before north's order. south's capacity is 1,500 units per year. the costs for producing those 1,200 units follow