Part 1/. Jack's Construction Co. has 80,000 bonds outstanding that are selling at par value ($1000). Bonds with similar characteristics are yielding 8.5%. The company also has 4 million shares of common stock outstanding. The stock has a beta of 1.1 and sells for $40 a share. The Treasury bill is yielding 4% and the rate of return from the market is assumed to be 11%. Jack's tax rate is 35%. What is Jack's weighted average cost of capital?

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Part 2/ Find the true answer betwen A, B and C

The duration of a 2 year annual 10% bond that is selling for par is:

A. 2.00 years

B. 1.00 years

C. 1.91 years D. 2.09 years