1) For the following company, what is the correct weight of the company's common stock? Preferred stock $350 million, Bonds $400 million, Common $685 million.

Question 1 options:

A)

25%

B)

28%

C)

24%

D)

48%

2) What is the cost of the following preferred stock? Price $32.55 per share. Dividend $4.11 per share.

Question 2 options:

A)

13%

B)

7.22%

C)

9%

D)

8%

3) What is the cost of the following common stock? Price $44.82 per share. Dividend $1.56 per share. Expected growth rate 6% per year.

Question 3 options:

A)

6%

B)

3%

C)

9%

D)

12%

4) What is the cost of the following bond? Maturity 20 years, Face value $1,000, coupon 8%, Yield 9%, tax rate 22%

Question 4 options:

A)

9%

B)

8%

C)	Cannot calculate without further information

D)

7%

5) Calculate the WACC for the following: Bonds $100 million (with a cost of 8%), common $200 million (with a cost of 6%), Preferred $50 million (with a cost of 9%).

Question 5 options:

A)

8.43%

B)

9.65%

C)

7.00%

D)

10.29%