Orono Corp.'s sales last year were $450,000, its operating costs were $362,500, and its interest charges were $12,500. What was the firm's times interest earned (TIE) ratio?

Select the correct answer.

a. 4.80

b. 9.20

c. 7.00

d. 5.90

e. 8.10

Quinlan Enterprises stock trades for $52.50 per share. It is expected to pay a $2.50 dividend at year end (D₁ = $2.50), and the dividend is expected to grow at a constant rate of 5.50% a year. The before-tax cost of debt is 7.50%, and the tax rate is 25%. The target capital structure consists of 45% debt and 55% common equity. What is the company's WACC if all the equity used is from reinvested earnings?

a. 8.84%

b. 7.53

c. 8.50

d.8.18

e. 7.85