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 M300 a share. - The company's dividend is currently M20.00 a share ( D0=M20.00), and is expected to grow at a constant rate of 6 percent per year. - The company's tax rate is 30 percent. Page 1 of 3 What is the company's weighted average cost of capital (WACC)? (20 marks) 2. As the director of capital budgeting for Denver Corporation, you are evaluating two mutually exclusive projects with the following net cash flows: Ye Denver's cost of capital for both projects is 15 percent. Evaluate and make a selection on the best investment based on the following techniques: 1. NPV (5 marks ) 2. Payback Period (3 marks) 3. PI (2 marks) 4. IRR (10 marks ) 3. Consider the following information and calculate the Weighted Average Cost of Capital. (20 marks) Page2of3 4. Polk Products is considering an investment project with the following cash flows