As the acting CFO of Oracle Corporation, you have been tasked with increasing the companys valuation. Several options are under consideration and need your assessment. (10 points each) The company may issue preferred stock to raise $500 million to fund new wireless networking products. The products are estimated to provide a 13% IRR. What is WACC currently? How much would it be if the preferred stock is issued? Is this a feasible alternative? Facts: Current debt costs 4.0% (net of tax), current equity costs 12.25%, and the preferred stock would cost 10.00%. Debt currently is $300 million and equity is $900 million. The company could choose to execute a stock buyback. Based on the ValueLine report provided, is Oracles stock overpriced, underpriced, or is it fairly priced? Is a stock buyback feasible?

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