1)Economic conditions during the next year are expected to be strong, normal, or weak, and the firm's returns will have the probability distribution shown below. What's the standard deviation of the estimated returns?

Conditions Prob return

Strong 25% 32.0%

Normal 50% 10.0%

Weak 25% -16%

2)

The Company's last annual dividend was $1.65 per share. Its annual dividend growth rate is expected to be constant at 2.50% in perpetuity. The risk free rate of return is 1%, the expected return on the market is 7.50% and the company's beta is .90. What is the best estimate of the current stock price?

3) Several years ago a company sold 125,000 ($1,000 par value) bonds that now has 5 years to maturity and a 6.00% annual coupon rate. The bond currently sells for $850, and the companys tax rate is 40%. The Company's current stock is priced at $20 per share and has 25,000,000 shares outstanding. The annual Treasury rate is 2% and the annual expected return on the market is 8%. The stock has a Beta of .90. What is the WACC?