1)What is the WACC for a firm using 50% equity with a required return of 12%, 30% debt with a required return of 6%, 20% preferred stock with a required return of 8%, and a tax rate of 35%?

2)A producer that is worried about the future price that will be available when the product is to be sold can hedge this price risk by:

3)What is the targeted debt ratio of a firm that issues $60 million in bonds and $120 million in equity to finance its new capital projects?

4)Calculate the profit per share for an investor that exercises a call option with a strike price of $40 when the stock is selling for $55 and the premium for the call option was $6.