Q2. The company has 8.3 million shares of common stock outstanding. The current share price is $53, and the book value per share is $4. The company's stock has a beta of 1.15. The risk-free rate is 3.7 percent, and the market risk premium is 7 percent. The company has two debt series: The first bond issue has a face value of $70 million and a coupon rate of 7 percent and sells for 108.3 percent of par. The second issue has a face value of $60 million and a coupon rate of 7.5 percent and sells for 108.9 percent of par. The first issue matures in 8 years, the second in 27 years Assume that the overall cost of debt is the weighted average implied by the two outstanding debt issues, weight is based on market value of the bonds. Both bonds make semiannual payments. The tax rate is 35 percent. What is the company's WACC? Part II: MEH QI: True of False: Which of the following statements are true about the efficient market hypothesis! a. It implies perfect forecasting ability It implies that prices reflect all available information c. It implies an irrational market d. It implies that prices do not fluctuate e. It results from keen competition among investors Q2. A stock market analyst is able to identify mispriced stocks by comparing the average price for the last 10 days to the wverage price for the last 60 days If this is true, what do you know about the market? Bused on the information the market is weak form efficient of semi-strong form efficient or strong form efficient