1. ABC Inc.'s capital structure is 40% debt, 15% preferred, and 45% common equity, and its tax rate is 40%. For financing, (a) ABC sold a non-callable bond several years ago that now has 15 years to maturity with 8% annual coupon, paid semiannually, at a price of $1,065, and a par value of $1,000. (b) ABC sold a perpetual preferred stock for $95.50 per share, with a $7.50 annual dividend and a flotation cost of 3.00% of the price. (c) ABC also has beta = 1.15, risk free rate of return r_RF = 6.00%; market risk premium RP_M = 7.00%;

The question is: What is the company's WACC?

2. ABC is considering a project that has the following cash flow and WACC data.
   1. What is the project's NPV?
   2. What is the project's IRR?
   3. What is the projects MIRR?
   4. Should the project be accepted? Why?

WACC: The result of (1) above

Year 0 1 2 3 4 5

Cash flows -$1,100 $400 $390 $380 $370 $360