1. Given the following table (assume no preferred stock is outstanding or to be issued), what should be the WACC at 30% debt:?

Table 14.2. Cost of Capital Projections for Exercise 1

% debt	cost of debt	after-tax cost of debt (T=25%)	% equity	cost of equity	WACC
0%	6.4%			9.0%
10%	6.4%			9.8%
20%	6.9%			10.4%
30%	7.7%			11.0%
40%	8.4%			12.5%
50%	9.2%			14.4%
60%	10.0%			16.8%
70%	11.5%			19.0%
80%	13.0%			25.0%
90%	18.0%			32.0%
100%	25.0%			47.0%

A firm believes that if sales increase by 3%, their Net Income will increase by 5%. What is there degree of total leverage?