A firm with low operating leverage has: A. low fixed costs in its production process. B. high variable costs in its production process. O C. high fixed costs in its production process. O D. high price per unit. O E. low price per unit. Firms whose revenues are weakly cyclical and whose operating leverage is low are likely to have: O A. low betas. B. high betas. O C.zero betas. O D.negative betas. Tom's Construction Co. has 80,000 bonds outstanding that are selling at par value. The before-tax cost of debt is 8.5%. The company also has 4 million shares of common stock outstanding. The stock has a beta of 1.1 and sells for $40 a share. The U.S. Treasury bill is yielding 4% and the market risk premium is 8%. Tom's tax rate is 35%. What is Tom's weighted average cost of capital? O A. 7. 10% O B. 7.39% O C. 10.38% O D. 10.65%