15. Securitization is the process of pooling mortgages or other types of loans and then selling claims or securities against that pool in a secondary market. A. True B. False Use the following information to answer questions 16 and 17. A corporation has 10,000 bonds outstanding with an 8% annual coupon rate, 10 years to maturity, a $1,000 face value, and a $970 market price. The company's 500,000 shares of common stock sell for $45 per share, have a beta of 1.5, the risk-free rate is 5.5%, and the market risk premium is 7%. 16. What is the cost of equity for this corporation? A. 6.00% B. 12.00% C. 16.00% D. 16.50% E. none of the above 17. Assuming a 30% tax rate, what is this corporation's after-tax cost of debt? A. 2.69% B. 4.48% C. 5.07% D. 5.92% E. none of the above 18. Polk Products is considering an investment project requiring a net investment of $45,000 and providing the following end of year net cash flows: The company has a 10 percent cost of capital. What is the project's net present value? A. $132,160 B. $140,000 C. $113,978 D. $158,978