1. If Wild Widgets Inc. were an all-equity company, it would have a beta of 1.35 . The company has a target debt-to-equity ratio of 0.2 . The expected return on the market portfolio is 10 percent, and Treasury bills currently yield 5.0 percent. The company has one bond issue outstanding that matures in 20 years and has a 9.0 percent coupon rate. The bond currently sells for $1,180. The corporate tax rate is 34 percent. a. What is the company's cost of debt? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit % sign in your response.) Cost of debt % b. What is the company's cost of equity? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit % sign in your response.) Cost of equity % c. What is the company's WACC? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit % sign in your response.) WACC 2. Zoso is a rental car company that is trying to determine whether to add 25 cars to its fleet. The company fully depreciates all its rental cars over five years using the straight-line method. The new cars are expected to generate $175,000 per year in earnings before taxes and depreciation for five years. The company is entirely financed by equity and has a 30 percent tax rate. The required return on the company's unlevered equity is 15 percent, and the new fleet will not change the risk of the company. a. What is the maximum price that the company should be willing to pay for the new fleet of cars if it remains an all-equity company? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Maximum price $ b. Suppose the company can purchase the fleet of cars for $430,000. Additionally, assume the company can issue $295,000 of five-year, 8 percent debt to finance the project. All principal will be repaid in one balloon payment at the end of the fifth year. What is the APV of the project? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit \$ sign in your response.) Adjusted present value $