1. Given the following information for Jano Corp. find the WACC. Assume the company's tax rate is 39%. Bonds: 10,000 7% coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 102 % of par; the bonds make semi-annual payments. Common Shares: 500,000 shares outstanding, selling for $50 per share; the beta is 15. Preferred shares: 25,000 shares of 5% preferred stock outstanding, currently selling for $65 per share. 8% market risk premium and 4% risk-free rate.

1. 10.53%
2. 10.45%
3. 9.97%
4. 10.17%
5. 10.77%

2. Neal owns a convertible bond that matures in four years. The bond has an 8 percent coupon and pays interest annually. The face value of the bond is $1,000 and the conversion price is $20.65. Similar bonds have a market return of 7.5 percent. The current price of the stock is $20.82. What is the conversion value of this bond?

1. $1,008.23
2. $989.00
3. $1,000.00
4. $1,014.88
5. $1056.66