WACKO Ltd. has $50 million in debt, equity of $75 million, an after-tax cost of debt of 6 percent, a cost of equity of 8 percent, and a tax rate of 35 percent. The firm's weighted average cost of capital (WACC) is

	a.	4.68%
	b.	5.52%
	c.	6.36%
	d.	7.20%
	e.	none of the above

Richard has $2,000.00 to invest, but he is willing to borrow money to increase the size of his investment. How much should Richard borrow to construct a portfolio with an expected return of 9% if the risk-free rate is 4% and the expected return of the optimal portfolio is 7%?

	a.	$400.00
	b.	$3,333.33
	c.	$1,333.33
	d.	$666.67
	e.	$200.00