Firm ABC has no debt and a cost of equity capital of 14%. Firm XYZ has $300 million in debt. With the exception of its capital structure, firm XYZ is identical to firm ABC in all ways. Neither firm pays taxes. What is the weighted average cost of

capital for firm XYZ? Round all intermediate calculations to 6 decimal points. Your

final answer should be within 0.03% of the correct answer choice.

10.00%

12.00%

14.00%

8.00%

A zero-coupon bond has face value of $1000, 15 years to maturity, and a price of $575.68. What is the yield of this bond? Round all intermediate calculations to 6 decimal points. Your final answer should be within 0.05% of the correct answer

choice.

A

3.75%

4.50%

4.25%

4.91%