| . 1 Normal 1 Sin espa... Ttulo 1 Prrafo Titulo 2 Ttulo Su Estilos 1.1.2.1.3 1.4 1.5 1.6 1.7 1.8 1.9 110 111 112 113 114 115 116 117 11 20 points QUESTION 2 1. Lebron James Industries Inc. has the following capital. Debt: The firm issued 90025-year bonds fiveyears ago which were sold at a par value of $1000. The bonds carry a couponrate of 7% but are currently selling to yieldnew buyers 10% Preferred stock: 3500 shares of8% preferredwere sold 12 years ago at a par value of$50. They're now priced to yield 11%. Equity: The fimm got started with the sale of 10000 shares ofconmonstock at $100 per share. Since that time eamings of $800000 have beenretained. The stockis now selling for $89. Whitley's business plan for next year projects net income of$300000, half ofwhich will be retained. The firm's marginal taxrate is 37% including federal and state obligations. It pays flotation costs of 11% on all new stock issues. Whitley is expected to grow at a rate of3.5% indefinitely and recently paid anamual dividend ofS4 Assume that the coupon payments are semi-annual 1. Develop Whitley's WACC before the retained earrings break. Round the answer to two decimal places. Do not roundvou intermediate calculations. Enter numbers only, do not include the "". % 2. Develop Whitley's WACC after the retaine deamings break Roundthe answer to two decimal places. Do not round your intermediate calculations. Enter numbers only: do not include the "0". 3. Indicate how much capital will have beenraisedwhen the break occurs. Round your answer to the nearest dollar. Do not roundyour intermediate calculations. Enter numbers only do not include the "S" or corrmas. 30 points | . 1 Normal 1 Sin espa... Ttulo 1 Prrafo Titulo 2 Ttulo Su Estilos 1.1.2.1.3 1.4 1.5 1.6 1.7 1.8 1.9 110 111 112 113 114 115 116 117 11 20 points QUESTION 2 1. Lebron James Industries Inc. has the following capital. Debt: The firm issued 90025-year bonds fiveyears ago which were sold at a par value of $1000. The bonds carry a couponrate of 7% but are currently selling to yieldnew buyers 10% Preferred stock: 3500 shares of8% preferredwere sold 12 years ago at a par value of$50. They're now priced to yield 11%. Equity: The fimm got started with the sale of 10000 shares ofconmonstock at $100 per share. Since that time eamings of $800000 have beenretained. The stockis now selling for $89. Whitley's business plan for next year projects net income of$300000, half ofwhich will be retained. The firm's marginal taxrate is 37% including federal and state obligations. It pays flotation costs of 11% on all new stock issues. Whitley is expected to grow at a rate of3.5% indefinitely and recently paid anamual dividend ofS4 Assume that the coupon payments are semi-annual 1. Develop Whitley's WACC before the retained earrings break. Round the answer to two decimal places. Do not roundvou intermediate calculations. Enter numbers only, do not include the "". % 2. Develop Whitley's WACC after the retaine deamings break Roundthe answer to two decimal places. Do not round your intermediate calculations. Enter numbers only: do not include the "0". 3. Indicate how much capital will have beenraisedwhen the break occurs. Round your answer to the nearest dollar. Do not roundyour intermediate calculations. Enter numbers only do not include the "S" or corrmas. 30 points