1- Calculate the WACC of a firm whose stock price is $25 and which has 5 million shares outstanding. The firm's cost of equity is 9%. The firm has also issued $100 million bonds at an interest rate of 6%. The company pays 40% tax.

2- A firm has 13% WACC, a 16% cost of equity, an 8% cost of debt, and the 40% tax rate. Find its debt ratio.

3- you own 1000 shares in company ABC, which has a dividend policy of 0.10 per quarter per share or the option to reinvest the cash dividend into additional shares of company stock. The current stock price (ex-dividend) is 10.00$. How many shares of stock will you receive each dividend period if you choose the dividend reinvest plan? a. 10 shares b. 12 shares c. 11.22 shares d. 100 shares

3- Adding taxes and bankruptcy to the M&M's propositions suggests: A. that a firm can increase its value if it increases its financial leverage. B. that the firm's maximum value is the point where the lax shield is equal to the marginal cos of bankruptcy C. that a firm can increase its value if it decreases its financial leverage. D. that a firm prefers internal financing over external funds.