1. Miranda Mining Corporation has 14 million shares of common stock outstanding, 900,000 shares of 9 percent preferred stock outstanding ($100 par value), and 220,000 ten percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $42 per share and has a beta of 1.15, the preferred stock currently sells for $80 per share, and the bonds have 17 years to maturity and sell for 91 percent of par ($1,000 par value). The market risk premium is 11.5 percent, T-bills are yielding 7.5 percent, and the firm's tax rate is 21 percent. What discount rate should the firm apply to a new project's cash flows if the project has the same risk as the firm's typical project?
2. What are flotation costs and how are these costs included in an NPV analysis?

*please show numeric work on excel (preferred) or hand written.*