Q1: The following table sets out the book values and current market values of ABC company debt and equity.

	Book Value	Market Value
Bond	$200,000	$182,332.38
Preference Shares	$2,000,000	$7,200,000
Ordinary Shares	$2,500,000	$15,750,000

Other Information:

• The required rate of return for preference and ordinary shareholders are currently 11% and 15%, respectively.
• The yield to maturity of the bond is 9%
• The companys tax rate is 30%.

What is the after tax Weighted Average Cost of Capital?

Q3: What is your return on exercising a put option which was purchased for $7 with an exercise price of $41? The stock price at expiration is $32.