Tanta Co. has 2,000,000 shares outstanding and 200,000 bonds outstanding. Tanta has a beta of 1.2 and a recently paid dividend. The dividend is expected to grow at 3%, forever. The risk-free rate of return is 3% and the market risk premium is 6%. The current price per share is $85. The bonds have a face value of $1,000 and a current price of $1,100. There are 10 years left to maturity and the coupon rate is 6%, paid annually. The tax rate is 21%. What is the overall required rate of return of Tanta Co.?

Submarines control how much they float or sink in the ocean by changing the volume of air and water contained in large ballast tanks. when the tanks are completely full of water, the submarine increases its overall mass and sinks down to the bottom. when the tanks are completely full of air, the submarine reduces its overall mass and floats to the surface. depending on the density of the seawater surrounding the submarine, it will pump seawater in or out of the tanks in order to achieve the same overall density as the sea water and float neutrally in the water. the volume of the submarine never changes. when the tanks are completely full of water, a submarine with a volume of 7.8\times10^3\text{ m}^37.8×10 3 m 3 7, point, 8, times, 10, start superscript, 3, end superscript, space, m, start superscript, 3, end superscript has a total mass of 8\times10^6\text{ kg}8×10 6 kg8, times, 10, start superscript, 6, end superscript, space, k, g. the density of the seawater is 10^3\text{ kg/m}^310 3 kg/m 3 10, start superscript, 3, end superscript, space, k, g, slash, m, start superscript, 3, end superscript. to make that submarine float neutrally, and neither float nor sink in the ocean, what volume of water does that submarine need to subtract from its tanks?