1. A particular firm has an operating leverage of 1.2. If the firm's sales decrease by 8%,its percentage change in EBIT would be?
2. A firm's debt and equity is composed of $10 million debt,$1 million of preferred stock, and $9 million of common stock. Assuming the marginal tax rate is 30%, the cost of debt is 12%, cost of preferred stock is 17%, and a cost of common stock of 20%,what is the firm's weighted average cost of capital?