21- A seasoned equity offering:

A) Involves venture capitalists.

B) Must be a private offering.

C) Involves the issuance of new shares.

D) Involves the sale of treasury stock.

E) None of the above.

22- XYZ Co. is operating at its target capital structure with market values of $120 million in equity and $145 million in debt outstanding. XYZ plans to finance a new $42 million project using the same relative weights of debt and equity. Ignoring flotation costs, how much new debt must be issued to fund the project?

A) $27.4 million

B) $23.0 million

C) $17.2 million

D) $14.1 million

E) $31.3 million

26- A portfolio has an expected return of 12.38%. The portfolio consists of stock A with an expected return of 7.52% and stock B with a beta of 1.39. The risk-free rate of return is 2.5% and the market risk premium is 7.5%. What is the portfolio weight of Stock B?

A) 10.08%

B) 39.58%

C) 60.28%

D) 71.21%

E) 89.92%