Question 1 (Mandatory) (3 points) PNB Industries has 20 million shares of common stock outstanding with a market price of $18.00 per share The company also has outstanding preferred stock with a market value of $50 million, and 500,000 bonds outstanding, each with face value $1,000 and selling at 97 percent of par value. The cost of equity is 15 percent, the cost of preferred is 12 percent, and the cost of debt is 8.50 percent. If PNB's tax rate is 40 percent, what is the WACC? 0 9.47 percent 0 7.05 percent O 11.31 percent O 11.83 percent Question 2 (Mandatory) (3 points) Suppose that Wave Runners' common shares sell for $35 per share, are expected to set their next annual dividend at $2.00 per share, and that all future dividends are expected to grow by 10 percent per year, indefinitely If Waye faces a flotation cost of 15 percent on new equity issues, what will be the flotation Question 2 (Mandatory) (3 points) Suppose that Wave Runners' common shares sell for $35 per share, are expected to set their next annual dividend at $2.00 per share, and that all future dividends are expected to grow by 10 percent per year, indefinitely. If Wave faces a flotation cost of 15 percent on new equity issues, what will be the flotation adjusted cost of equity? O 16.72 percent O 15.71 percent 10.07 percent O 6.73 percent