27) The Cs Company is presented with the following two mutually exclusive projects. The required return for both of them is 11%. Which project do you choose, in your new job as the chief financial officer of the Cs Company?

Year Project M cash flows Project N cash flows

0 $-55,000 $-720,000

1 12,000 180,000

2 31,000 900,000

3 159,000 470,000

a. Project M

b. Project N

28) A firm has 3,000,000 shares of common stock outstanding with a market price of $20.00 per share. It has 20,000 bonds outstanding, each selling for $1,100. The bonds mature in 10 years, have a coupon rate of 8.5%, and pay coupons annually. The firm's beta is 1.5, the risk free rate is 5%, and the market risk premium is 9%. The tax rate is 35%. Calculate the WACC. (take your time)

A) 8.99%

B) 9.33%

C) 10.34%

D) 11.71%

E) 14.77%

29) The notion that actual capital markets, such as the NYSE, are fairly priced is called the:

A) Efficient Markets Hypothesis (EMH).

B) Law of One Price.

C) Open Markets Theorem.

D) Laissez-Faire Axiom.

E) Monopoly Pricing Theorem.

30) The hypothesis that market prices immediately reflect all available, public and private, information is called efficiency in the:

A) Open form.

B) Strong form.

C) Semi-strong form.

D) Weak form.

E) Stable form.

31) The excess return required on a risky asset over that earned on a risk-free asset is called (a):

A) Risk premium.

B) Return premium.

C) Excess return.

D) Average return.

E) Variance.

32) You purchased 500 shares of stock on January 1, 2002, for $5 per share. The stock pays an annual dividend of $2 per share. On December 31, 2002, the market price is $9 per share. What is your total dollar return for the year?

A) $ 1,000

B) $ 500

C) $ 3,000

D) $ 2,000

E) -$ 500

33) You purchased a bond on January 1, 2002, for $1,035. The bond has a $1,000 face value, a 10% annual coupon, and can be sold for $1,035 on December 31, 2002. What is your percentage return on investment for the year?

A) 4.1%

B) 0.0%

C) 9.7%

D) -8.4%

E) 12.5%

The answers are bold but i need to know how you find the answers