1. Johnson Industries finances its projects with 40 percent debt, 10 percent preferred stock, and 50 percent common stock. - The company can issue bonds at a yield to maturity of 8.4 percent. - The cost of preferred stock is 9 percent. - The company's common stock currently sells for M30 a share. - The company's dividend is currently M2.00 a share ( D0=M2.00), and is expected to grow at a constant rate of 6 percent per year. - Assume that the flotation cost on debt and preferred stock is zero, and no new stock will be issued. - The company's tax rate is 30 percent. What is the company's weighted average cost of capital (WACC)? 2. As the director of capital budgeting for Denver Corporation, you are evaluating two mutually exclusive projects with the following net cash flows: If Denver's cost of capital is 15 percent, which project would you choose based on NPV and PAYBACK PERIOD