Question Completion Status: QUESTION 1 Daniel's Sound Systems has 210,000 shares of common stock outstanding at a market price of $36 a share. Last month, Daniel's paid an annual dividend in the amount of $1.593 per share. The dividend growth rate is 4%. Daniel's also has 6,000 bonds outstanding with a face value of $1.000 per bond. The bonds carry a 7 coupon, pay interest annually, and mature in 4.89 years. The bonds are selling at 99% of face value. The company's tax rate is 34. What is Daniel's weighted average cost of capital? a. 6.396 b. 5.896 C. 6.996 d. 7.296 QUESTION 2 The pecking order states how financing should be raised. In order to avoid asymmetric information problems and misinterpretation of whether management is sending a signal on security overvaluation the firm's first rule is to: issue debt first. always issue debt then the market won't know when management thinks the security is overvalued. issue new equity first. finance with internally generated funds. QUESTION 3 The diagram below illustrates the trade-off theory of capital structure. The lines C and D are: Vale of