Important General Instructions for Reporting Numerical Answers: -Do not round intermediate calculations. - Report your answers to the number of decimal places requested. - Unless otherwise instructed, solve problems in the given units. IE: if given units are in $K, complete your computations in these units and, as applicable, report your answer in these units (without writing "$" or "K"). - Do not report any numerical answer as a percent. IE: for example, write 0.324 instead of 32.4%. - Report negative numbers with a leading minus sign, like this (for example): -23.451 Not like this: (23.451). - Note that Canvas removes trailing insignificant figures. If you type, for example, 41.350, Canvas will remove the last decimal place and record your answer as 41.35 This is fine because 41.35 = 41.350. - Assume time is measured in years unless otherwise stated. > Question 1 1 pts MedCo's pre-tax cost of debt capital is 10%. The firm has $2MM in outstanding debt. Its tax rate is 30%. What is the firm's weighted average post-tax cost of capital? Round your answer to three decimal places. Question 2 1 pts Your friend is selling 100K shares at $1 each in his new, specialized company, OppCo. This represents 100% of OppCo's shares. OppCo will invest the paid in capital for one year, with the expectation (hope) that it will be able to return shareholders $1.25 per share after one year, when the firm will be closed down. What is OppCo's cost of equity capital, rE? Round your answer to two decimal places. Hint: This is a really simple problem like the Specialized Entity example in the CH14 lecture handout. We don't need CAPM or something similar for this problem. We need something like CAPM for Normal, Ongoing Entities. Question 3 Consider OppCo, described in the previous question. Bankrutpcy aside, are equity investors in OppCo guaranteed to earn r? No. Yes 1 pts