You are a financial analyst working for Jeffrey Fox, WVVIs CFO. Fox needs to evaluate two long-term capital budgeting proposals and asks you to calculate the companys weighted average cost of capital (WACC) at the end of 2009. You have WVVIs recent financial statements (Figures 1 & 2) and data on their outstanding long-term debt (Figure 3).2 In addition, you collect the stock market data shown in Figure 4 and the historical data on asset returns in Figure 5. Finally, Figure 6 provides current yields on U.S. Treasury securities.3

Willamette Valley Vineyards 1 - Line of credit with Northwest Farm Credit Union; \$1.5 million maximum; 6.5% annual interest 2 - Private placement bonds; maturity is 12/31/2020,$1,000 face value, 8% coupon (semi-annual payments in January and July), current price =$978.00 Willamette Valley Vineyards Financial Statements Willamette Valley Vineyards Willamette Valley Vineyards 1 - Line of credit with Northwest Farm Credit Union; \$1.5 million maximum; 6.5% annual interest 2 - Private placement bonds; maturity is 12/31/2020,$1,000 face value, 8% coupon (semi-annual payments in January and July), current price =$978.00 Willamette Valley Vineyards Financial Statements Willamette Valley Vineyards