Alpha Beta Corp. has a capital structure that is 40% debt, 15% preferred stock, and 45% common equity. The pre-tax cost of debt is 10%, the cost of preferred stock is 7.5%, and the cost of common equity is 12.8%. The firms tax rate is 40%. The WACC is closest to:

Part A options:

	10.1%
	8.2%
	9.3%
	6.5%

Keenan Industries has a bond outstanding with 15 years to maturity, an 8.25% semiannual coupon, and a $1,000 par value. The price of the bond is $1,166. What is the yield to maturity of this bond?

Part b options:

	6.50%
	7.08%
	3.25%
	3.54%

Part c

Bond prices will rise if interest rates fall.

options:

	True
	False

Part D

A bond has a $1,000 par value, a 17% annual coupon, and matures in 20 years. What is the price of this bond if it has a yield to maturity of 12%?

options:

	$719
	$1,373
	$2,262
	$1,412