1) A firm has 4,000,000 shares of stock outstanding with a price per share equal to fs There are 200,000 bonds outstanding each priced at $995 each. The cost of e percent, the cost of debt is 8 percent,and the corporate tax rate is quity is I 34 percent. What is the a) 10.30 percent. b) 9.84 percent c) 7.96 percent d) 8.81 percent e) 5.55 percent. 2) To estimate the risk-free rate in developed economies, the analyst should use a) A value-weighted average of a portfolio of short-term commercial bonds b) Short-term local government bonds c) U.S. govenment 3-Month Treasury Bills d) Local government bonds that best match the length of cash flow estimates used in the valuation. All of the above are necessary. e) 3) The weights to use in the WACC should reflect the: a) Current book values. b) Analyst consensus estimates of past weights. c) Past book values. d) Market-based values e) Book values in the case of bonds and market values in the case of equity Which of the following is NOT a property necessary for a consistent estimate of the WACC? 4) a) It uses book-value-based weights. b) It includes the opportunity cost of all investors. c) It includes related costs/benefits such as the interest tax shield. d) The duration of the securities used in estimating the WACC equals the duration of the free cash flows. All of the above are necessary. e)