1. WACC. Eric has another get-rich-quick idea, but needs funding to support it. He chooses an all-debt funding scenario. He will borrow

$5,342

from Wendy, who will charge him 5% on the loan. He will also borrow $3,968 from Bebe, who will charge him 7% on the loan, and

$2,690 from Shelly, who will charge him 13% on the loan. What is the weighted average cost of capital for Eric?

What is the weighted average cost of capital for Eric?

(Round to two decimal places.)

2. WACC. Grey's Pharmaceuticals has a new project that will require funding of $11.0 million. The company has decided to pursue an all-debt scenario. Grey's has made agreements with four lenders for the needed financing. These lenders will advance the following amounts at the interest rates shown:Click on the Icon

in order to copy its content into a spreadsheet.

Lender	Amount	Interest Rate
Steven	$3,971,703		13%
Yang	$3,225,675		11%
Shepherd	$2,614,235		9%
Bailey	$1,188,387		10%

What is the weighted average cost of capital for the

$11,000,000?

(Round to two decimal places.)

3. Cost of preferred stock.Kyle is raising funds for his company by selling preferred stock. The preferred stock has a par value of $121 and a dividend rate of 10.5% The stock is selling for

$78.71 in the market. Kyle hires Wilson Investment Bankers to sell the preferred stock. Wilson charges a fee of 3% on the sale of preferred stock. What is the cost of preferred stock for Kyle using the investment banker?

What is the cost of preferred stock for Kyle using the investment banker?

(Round to two decimal places.)

4. Cost of equity: SML. Stan is expanding his business and will sell common stock for the needed funds. If the currentrisk-free rate is 3.9% and the expected market return is 13.1%, what is the cost of equity for Stan if the beta of the stock is

a. 0.54?

b. 0.82?

c. 1.08?

d. 1.42?

a. What is the cost of equity for Stan if the beta of the stock is

0.54?

(Round to two decimal places.)