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27. A company has $100 million in outstanding bonds, and 10 million shares of stock currently trading at $36 per share.The bonds pay an annual

27. A company has $100 million in outstanding bonds, and 10 million shares of stock currently trading at $36 per share.The bonds pay an annual coupon rate of 9% and is trading at par. The company's beta is 1.1, its tax rate is 40%, the risk-free rate is 5%, and the market risk premium is 6%. What is this firm's WACC?

20. Company XYZ is preparing a business plan. They expect to make a profit of $28380 in year 1, $148619 in year 2, and continue growing at the same rate until year 5. What is the growth rate implied in this forecast?

8. Assume that as an investor, you decide to invest part of your wealth in a risky asset that has an expected return of 11%, and a standard deviation of 14%. You invest the rest of your capital in the risk-free rate, which offers a return of 3%. You want the resulting portfolio to have an expected return of 5%. What percentage of your capital should you invest in the risky asset?

3. Assume a corporation is expecting the following cash flows in the future: $-4 million in year 1, $11 million in year 2, $18 million in year 3. After year 3, the cash flows are expected to grow at a rate of 5% forever. The discount rate is 13%, the firm has debt totaling $35 million, and 9 million shares outstanding. What should be the price per share for this company?

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