Taggart Transcontinental currently has no debt and an equity cost of capital of 16%. Suppose that Taggart decides to increase its leverage and maintain a debt to equity ratio of 1/2 and its cost of debt cost will be 9%. The corporate tax rate is 35%. Assuming that Taggart's pre-tax cost of capital (Pretax WACC) remains constant, then with the addition of leverage. Taggart's effective after-tax cost of capital (WACC) will be closest to: A 14.9596 B. 16.109 C. 12.9096 OD. 13.50% Food For Less (FFL), a grocery store, is considering offering one hour photo developing in their store. The firm expects that sales from the new one hour machine will be $150,000 per year. FFL currently offers overnight film processing with annual sales of $100,000. While many of the one hour photo sales will be to new customers, FFL estimates that 60% of their current overnight photo customers will switch and use the one hour service. Suppose that of the 60% of FFL's current overnight photo customers who will switch and use the one hour service, half would start taking their film to a competitor that offers one hour photo processing if FFL fails to offer the one hour service. The level of incremental sales associated with introducing the new one hour photo service is closest to: $60,000 $120,000 $125,000 $150,000 Rally, Inc., is an all-equity firm that has 10 million shares outstanding. The firm's stock is currently traded at $3 per share. Rally plans to announce a leveraged recapitalization plan in which it will borrow $10 million and use these funds to repurchase its shares. The firm's corporate tax rate is 35%6, and Rally plans to keep its outstanding debt equal to $10 million permanently. At the announcement of the leveraged recapitalization plan, the share price of Rally is closest to A. $2.95 B. $3.00 C. $3.40 D. 53.35 Omega Corp. has a market capitalization of $250 million, and $100 million in outstanding debt. The firm's cost of equity and cost of debt are 15% and 5%, respectively. The corporate tax rate is 35%. As a project manager, you can identify Omega Corp as a comparable firm for the project you are evaluating. If the project is financed by both debt and equity, the project's cost of capital is closest to: A. 11.6496 B.16.1196 C. 15.00% D. 12.1496