1. The BBB Co. has 1.4 million shares of stock outstanding. The stock currently sells for $20 per share. The firm's debt is publicly traded and was recently quoted at 9:3 percent of face value. It has a total face value of $5 million, and it is currently priced to yield 11 percent. The risk-free rate is 8 percent, and the market risk premium is 7 percent. You've estimated that BBB has a beta of .74. If the corporate tax rate is 34 percent, what is the WACC of BBB? Chapter 9 Brealey: 1, #12 (pg.243) Nero Violins has the following capital structure: Securit Debt Preferred Stock Common Stock BetaTotal market value (S millions 0 0.20 $40 1.20 $299 $100 a) What is the firm's asset beta (Hint: What is the beta of a portfolio of alhe firm's securities?) b) Assume that the CAPM is correct. What discount rate should Nero set for investments that expand the scale of its operations without changing its asset beta? Assume a risk-free interest rate of 5% and a market risk premium of 6%