1. Micro International is planning to issue new shares in the stock market. The risk-free rate is 5% and the expected return on the market this year is expected to be 13%. The beta of the company is 1.2. If the companys costs of debt is 10%, what is the domestic weighted average cost of capital (WACC) if it uses 30% debt and the tax rate is 30%?

   		.0922 or 9.22%
   		o.1722 or 17.22%
   		.1232 or 12.32%
   		10.99%

QUESTION 2

1. Continuing with Question 1, assume the global beta is 1.1 and the expected return on a world market portfolio is 12%. What is the weighted average cost of capital (WACC) if we use the global beta and world market portfolio? Assume the same proportion of debt and the same tax rate.

   		.1099 or 10.99%
   		.1189 or 11.89%
   		.1389 or 13.89%
   		.1232 or 12.32%