Assume that you are on the financial staff of Bagio Company, and you have collected the following data: The yield on the companys outstanding bonds is 7.75%, its tax rate is 40%, the next expected dividend is $0.65 a share, the dividend is expected to grow at a constant rate of 6.00% a year, the price of the stock is $19.00 per share, the flotation cost for selling new shares is F = 10%, and the target capital structure is 55% debt and 45% common equity. What is the firm's WACC, assuming it must issue new stock to finance its capital budget?

A.		6.97%
B.		9.93%
C.		7.88%
D.		9.76%
E.		7.48%

The Alenso Corporations target capital structure is 50% debt and 50% common equity. The cost of common equity is 13%, the before tax cost of debt is 9%, and the tax rate is 34%. What is WACC of Alenso Corporation?

		A. 8.65%
B.		9.00%
C.		9.47%
D.		10.8%
E.		13.1%