Coleman Technologies is considering two major expansion programs that have been proposed by the companys information technology group. Before proceeding with the expansions, the company must first estimate its weighted average cost of capital (WACC). Suppose you are the lead financial analyst on the project and your assistants have provided you with the following data, which they believe may be relevant to the task. 1. The firms tax rate = 25%. 2. For the bond: a) The current price = $1,153.72. on 1,000 par value bonds b) The coupon rate = 12% with semiannual payment. c) The years to maturity = 15 years. d) Flotation cost = 0. 3. For preferred stock: a) The current price = $30 with a dividend = $3.30 b) The par value = $100. c) Flotation cost = 0 4. For common stock: a) The current price = $55 per share. b) The current dividend (D0) = $2.10. c) Dividends are expected to grow at a constant annual rate = 9%. d) Flotation cost = 10% of the current price) e) The company's beta = 1.516.

Conduct a quick sensitivity analysis on the model you used to answer the previous questions. For the sensitivity analysis change by either decreasing, or increasing the value of one other factors which affects WACC. Identify 2 factors that could have caused the change?