1. Yahoos capital structure weight for debt is 55%, and the bonds have a coupon rate of 6.4% and a yield-to-maturity of 6.7%. The capital structure weight for equity is 30%. The stock currently trades at $32 per share, the next dividend is expected to be $1.40 and dividends are expected to grow at 1.8%. The capital structure weight for Preferred Stock is 15%, it is currently selling for $22 a share, and pays dividends of $1.50 per year. If the average tax rate is 22% and the marginal rate is 30%. What is the firms weighted average cost of capital (WACC)?

2. A proposed investment has an equipment cost of $600. It will have a life of 2 years. The cost will be depreciated straight-line to a zero-salvage value. Sales will be $2,150 per year and variable costs will run $208 per year, and fixed cost $106 per year. The firm will also need to invest $480 in net working capital. The corporate marginal tax rate is 32% while the average tax rate is 37%. What are the cash flows from assets (CFFA) for this project?