QUESTION $1$

Sakura$-$san and Kenji$-$san have completed the corporate finance course during their undergraduate study. They are currently

attempting to solve the following problems $(10$ points$)$:

a$)$ An investor has EUR $100,000$ to invest in a stock portfolio. Her$/$his choices are Stock X$,$ with an expected return of $14$ percent,

and Stock $Y,$ with an expected return of $11$ percent. If her$/$his goal is to create a portfolio with an expected return of $12\mathrm{.}4$ percent,

how much money will s$/$he invest in Stock X$?$ In Stock Y$?(3$ points$)$

A Japanese firm, namely Toshima Inc., has the following information and the executives assume that this is their optimal capital

structure.

The manager calculated the firm's WACC as $9\mathrm{.}24$ percent.

b$)$ Comment on and evaluate several issues of Tohsima Inc. in determining their WACC! $(4$ points$)$

c$)$ According to the Capital Structure and Dividend Policy theories, topics you learned, what could we infer for this Toshima Inc.

firm! $(3$ points$)$