Question # 3 Pearson International Souvenir Shop has a cost of debt of 8 percent, a cost of equity of 12 percent, and a cost of preferred stock of 9 percent. The firm has 116,000 shares of common stock outstanding at a market price of $24 a share. There are 51,000 shares of preferred stock outstanding at a market price of $38 a share. The bond issue has a face value of $900,000 and a market quote of 105. The company's tax rate is 35 percent. What is the weighted average cost of capital for Pearson International Souvenir Shop? (5 Marks) Question #4 You want to invest in a project in Canada. The project has an initial cost of C$1.6 million and is expected to produce cash inflows of C$750.000 a year for 3 years. The project will be worthless after the first 3 years. The expected inflation rate in Canada is 5 percent while it is only 3.5 percent in the U.S. The applicable interest rate for the project in Canada is 12 percent. The current spot rate is C$1 = $0.8637. What is the net present value of this project in Canadian dollars using the foreign currency approach? (5 Marks) Question #5 Thompson & Jones has earnings before interest and taxes of $149,000. Both the book and the market value of debt is $265.000. The unlevered cost of equity is 13.5 percent while the pre-tax cost of debt is 9 percent. The tax rate is 34 percent. What is Thompson & Jones' weighted average cost of capital