Examine the following book-value balance sheet for University Products Incorporated. The preferred stock currently sells for $15 per share and pays a dividend of $3 a share. The common stock sells for $20 per share and has a beta of 0.7. There are 1 million common shares outstanding. The market risk premium is 9%, the risk-free rate is 5%, and the firms tax rate is 21%.

BOOK-VALUE BALANCE SHEET
(Figures in $ millions)
Assets		Liabilities and Net Worth
Cash and short-term securities	$ 3.0	Bonds, coupon = 7%, paid annually (maturity = 10 years, current yield to maturity = 9%)	$ 10.0
Accounts receivable	5.0	Preferred stock (par value $20 per share)	3.0
Inventories	9.0	Common stock (par value $0.10)	0.1
Plant and equipment	20.0	Additional paid-in stockholders equity	16.9
		Retained earnings	7.0
Total	$ 37.0	Total

1. What is the market debt-to-value ratio of the firm?
2. What is Universitys WACC?