Question: 1- Problem Solving: Given the following information, what is the WACC? Common Stock:1 million shares outstanding, $40 per share, $1 par value, beta = 1.3

1- Problem Solving: Given the following information, what is the WACC? Common Stock:1 million shares outstanding, $40 per share, $1 par value, beta = 1.3 Bonds:10,000 bonds outstanding, $1,000 face value each, 8% annual coupon, 22 years to maturity,market price = $1,101.23 per bond Market risk Premium = 8.6 %, risk-free rate = 4.5%, marginal tax rate = 34%

2- The changes in the firm's future cash flows that are a direct consequence of accepting a project are called:

	A.	Incremental cash flows.
	B.	Stand-alone cash flows.
	C.	Aftertax cash flows.
	D.	Net present value cash flows.
	E.	Erosion cash flows.

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