1) Suppose Corporation A has a book (face) debt value of $13M, trading at 80% of face value. It also has book equity of $19 million, and 2.66 million shares of common stock trading at $26 per share. What is the weight for for common equity that Corporation A should use in calculating its WACC?

a) Suppose Corporation A has a book (face) debt value of $8M, trading at 82% of face value. It also has book equity of $23 million, and 1.45 million shares of common stock trading at $27 per share. What is the weight for debt that Corporation A should use in calculating its WACC?

b) JJ firm issues preferred dividends at an annual rate of $2.4. Its current preferred stock price is $21.66. Assume that the equity beta for JJ is 1.28. The Yield on 10-year treasuries is 3.14%, and that the market risk premium for the year is 6%. The company's EPS expected growth is 2%. For this year, the dividends for JJ firm are the same for common and preferred stock; additionally the price for common stock is $28. What is the preferred cost of equity for JJ Firm?

c) JJ firm issues preferred dividends at an annual rate of $5.09. Its current preferred stock price is $25.55. Assume that the equity beta for JJ is 0.95. The Yield on 10-year treasuries is 2.78%, and that the market risk premium for the year is 5%. The company's EPS expected growth is 4%. For this year, the dividends for JJ firm are the same for common and preferred stock; additionally the price for common stock is $32. What is the common cost of equity for JJ Firm using the CAPM method?