12. If the internal rate of return is higher than the cost of capital (discount rate)

a. the present value of all the cash inflows will be equal to zero

b. the present value of all the cash inflows will be higher than the initial outlay

c. the payback period will be very short

d. none of the above

13. You are hired as a consultant to a company, whose target capital structure is 30% debt, 18% preferred, and 52% common equity. The after-tax cost of debt is 8.00%, the cost of preferred is 9.50%, and the cost of retained earnings is 13.4%. The firm will not be issuing any new stock. What is its WACC?