Oceanic Airlines has a target capital structure of 60 percent common stock, 5 percent preferred stock, and 35 percent debt. Its cost of equity is 10 percent, the cost of preferred stock is 7 percent, and the pre-tax cost of debt is 5.25 percent. What is the firm's WACC given a tax rate of 35 percent? a) 10.31% b) 9.72% c) 9.98% d) 10.38% e) 7.54% The pre-tax cost of debt for a company whose LTD structure is bonds: a) is based on the yield to maturity of the firm's outstanding bonds. b) is equal to the coupon rate on the last bonds issued by a firm. c) is equivalent to the average current yield on all of a firm's outstanding bonds. d) is based on the original yield to maturity on the latest bonds issued by a firm. e) has to be estimated as it cannot be directly observed in the market The internal rate of return has some flaws we should be aware of. Two of these are: a) Arbitrary determination of a discount rate, and failure to consider initial expenditures. b) Arbitrary determination of a discount rate, and failure to correctly analyze mutually exclusive investment projects. c) arbitrary determination of a discount rate, and failure in the presence of non-normal cash flows d) Failure to consider initial expenditures, and failure to correctly analyze mutually exclusive investment projects. e) Failure to correctly analyze mutually exclusive projects, and failure in the presence of non-normal cash flows A has a return of 17% and D has a return of 9.5%. If you put 25% of your money in A and 75% in D, what is the return of your portfolio? a) 11.38% b) 9.67% c) 14.03% d) 5.62% e) 12.17%