Question #1: LUVFINANCE, Inc. is estimating its WACC. It is operating at its optimal capital structure. Its outstanding bonds have a 12 percent coupon, paid semiannually, a current maturity of 17 years, and sell for $1,162. It has 100,000 bonds outstanding. The firm can issue new 20-year maturity semiannual bonds at par but will incur flotation costs of $50 per bond (Hint: the coupon rate on the new bonds = the YTM on existing bonds). The firm could sell, at par, $100 preferred stock that pays a 12 percent annual dividend that is currently selling for $120. The firm currently has 1,000,000 shares of preferred stock outstanding. Rollins' beta is 0.5, the risk-free rate is 3.93 percent, and the market risk premium is 6 percent. The common stock currently sells for $100 a share and there are 5,000,000 shares outstanding. The firm's marginal tax rate is 40 percent. What is the WACC?

Question #2: Tommy wishes to determine the return on two stocks she owned in 2019.

At the beginning of the year, stock X traded for $64per share. During the year, X paid dividends of $7

At the end of the year, Xstock was worth $78

Calculate the annual rate of return, r, for X

(Enter the answer in % format without % sign -> 20.51 and not 20.51% or 0.2051)