1. Suppose a firm has a capital structure with 33% debt and faces a 27.8% tax rate. If the required return on debt is 5.5% and the required return on equity is 19.8, what is the WACC? Answer in percent e.g., 11.5 instead of .115 and provide at least three significant digits e.g., 4.56 or 12.1.
2. Suppose that the first cash flow of a venture is expected in Year 9, and expected to be $8,725,535. Cash flows will grow at a rate of 7% after that. Find the present value of the venture in dollars (at Year 0) assuming a discount rate of 20%.