1. Firm A has a tax rate = 25%; 20-year, 8% coupon, semiannual payment noncallable bonds selling for $900; 10%, $100 par value, quarterly dividend, perpetual preferred stock sells for $94; Common stock sells for $30 with D0 = $2 and g = 4%; the firm has beta = 1.2; rRF = 7%; RPM = 6%; the Bond-Yield Risk Premium = 5% and the target capital structure: 40% debt, 5% preferred, 55% common equity. What is the WACC?

2. Firm B has a tax rate = 35%; 20-year, 8% coupon, semiannual payment noncallable bonds selling for $900; 10%, $100 par value, quarterly dividend, perpetual preferred stock sells for $94; Common stock sells for $30 with D0 = $2 and g = 4%; the firm has beta = 1.2; rRF = 7%; RPM = 6%; the Bond-Yield Risk Premium = 5% and there are 1,000 bonds, 100 preferred shares, and 35,000 common equity shares. What is the WACC?

3. Firm C has a tax rate = 25%; 20-year, 7% coupon, annual payment noncallable bonds selling for $900; 10%, $100 par value, quarterly dividend, perpetual preferred stock sells for $104; Common stock sells for $30 with D0 = $2 and g = 4%; the firm has beta = 1.2; rRF = 7%; RPM = 6%; the Bond-Yield Risk Premium = 6% and on the accounting books they have listed $2 million of bonds, $500,000 of preferred stock and $2.5 million of common stock. What is the WACC?

4. Firm D has a tax rate = 21%; 10-year, 5% coupon, annual payment noncallable bonds selling for $990; 7%, $100 par value, quarterly dividend, perpetual preferred stock sells for $99; Common stock sells for $10 with D1 = $0.35 and g = 4%; the firm has beta = 1.0; rRF = 1%; RPM = 6%; the Bond-Yield Risk Premium = 4% and there are 1,000 bonds, 100 preferred shares, and 35,000 common equity shares; the balance sheet indicates $1 million of bonds, $10,000 of preferred stock and $200,000 of common stock; the target capital structure is 50% debt, 5% preferred, 45% common equity. What is the WACC using EACH of the weighting mechanisms? Which is the best technique and why? Worst and why?

5. Draw and discuss, why or why not, publicly traded firms with multiple divisions should not use a single WACC from the firm. In depth. A couple sentences will not suffice.