Consider Higgins Production which has the following information about its capital structures: - Debt - 1,500, 5 percent coupon bonds outstanding, $1,000 par value, 7 years to maturity, selling for 80 percent of par, the bonds make semiannual payments - Common Stock - 100,000 shares outstanding, selling for $45 per share; the beta is 0.80 - Preferred Stock - 25,000 shares of 6 percent preferred stock outstanding, currently selling for $150 per share - E Earket Information - 6 percent market risk premium and 4 percent risk-free rate. The WACC of the company is: a. 6.23% b. 8.8% c. 6.57% You are analyzing the leverage of two firms and you noted the following (all values in millions of dollars) Which firm will be in a better position to provide a better interest cover? a. Firm A is better because it coverage ratio is higher (3.75) compared to firm B b. Both firms are equal in providing adequate interest coverage. c. Firm B will be better because its interest cover ratio is lower than that of firm A d. Firm A will better because its coverage ratio is 2.2 You are analyzing the leverage of two firms and you noted the following (all values in millions of dollars) Which firm will be in a better position to provide a better interest cover? a. Firm A is better because it coverage ratio is higher (3.75) compared to firm B b. Both firms are equal in providing adequate interest coverage. c. Firm B will be better because its interest cover ratio is lower than that of firm A d. Firm A will better because its coverage ratio is 2.2