a. Both the capital asset pricing model and the dividend discount model can be used to determine the cost of equity financing.

True

False

b. What is the company's WACC if it has the following capital structure and 40% tax rate?

	Market Value	Required rate of return
Bond	$60,000,000	4%
Preferred Stock	$60,000,000	6%
Common Stock	$120,000,000	10%

7.1%

6.67%

7.5%

9.4%

please answer both parts