U D-42 22. JLP Industries has 6,5 million shares of price of $14.00 per share. The company lion shares of common stock outstanding with a market Share. The company also has outstanding preferred stock with et value of $10 million and i5.000 bonds, cach with a lace and lion and 25,000 bonds, each with a face value of $1.000 "Sat 90% of face. The cost of equity is 14%, the cost of preferred e cost of debt is 725 If the tax rate is 34%, what is JLPS WACC- and each selling at 90% of face. The co 10% and the cost of debt is 7.25%. If the A) 95% B) 10.0% C) 10.8% D) 11.6% E) 12.0% 23. im wants to create a weighted average cost of capital (WACC) of 9.5 percent The firm's cost of equity is 1 percent and its pre-tax cost of debt is 9 percent. The x rate is 35 percent. What does the debt-equity ratio need to be for the firm to achieve its target WACC? A)..28 B). .37 C). .41 D)..54 E). 59 The Five and Dime Store has a cost of equity of 15.8 percent, a pretax cost of debt of 7.7 percent, and a tax rate of 35 percent. What is the firm's weighted average cost of capital if the debt-equity ratio is 0.40? A). 10.18 percent B). 11.72 percent C). 12.72 percent D). 13.49 percent E). 14.93 percent 25. What is the beta of a portfolio made up of two risky assets and a risk-free asset? You invest 40% in asset A with a beta of 1.25 and 40% in asset B with a beta of 1.15. A) B) 0.84 0.96 1.03 C) 1.12 1.20