Thomas has just decided that his firm should obtain $10 million in bank financing from the Pacific Bank and Trust and should issue $25 million in new equity shares. Thomas has just made a(bad) _____ decision.

Select one:

a. Capital budgeting

b. Operational

c. Capital structure

d. Working capital

e. Marketing

A firm uses 55% equity and 45% debt for all of its financing needs. Shares of the common stock sell at $43. The company expects to pay $1.30 in dividends next year and increase that amount by 3% annually. The bonds have a 7% coupon rate and a yield-to-maturity of 6.8%. The company has a beta of 1.39 and a 34% marginal tax rate. What is the WACC?

Select one:

a. 5.88%

b. 5.33%

c. 5.48%

d. 6.37%

e. 6.03%

You are expecting annual cash flows of $10,000 in years 1-5; $15,000 in years 6-10; and $25,000 in years 11-25. If the rate of interest is 6% compounded annually, calculate the present value of this cash flow stream.

Select one:

a. $198,921

b. $224,921

c. $204,921

d. $244,921

e. $200,921

please answer all questions, thank you for your help.