1. Mistletoe Unlimited has 1,200 bonds outstanding that are selling for $992 each. The bonds carry a 5% coupon, pay interest semi-annually, and mature in 9 years. The company also has 9,500 shares of 5% preferred stock at a market price of $40 per share. This month, the company paid an annual dividend in the amount of $1.50 per share. The dividend growth rate is 5%. The common stock is priced at $30 a share and there are 35,000 shares outstanding. The company is considering a project that is equally as risky as the overall company. This project has initial costs of $650,000 and operating cash flows of $150,000 a year for the next 10 years and salvage value of $10,000 at the end of 10 years. The company also needs an initial decrease in inventory of $50,000, all of which will be recovered when the project is completed. The project will be depreciated straight-line to zero over the project