1. BlockOut Co. has 76,622 bonds outstanding that are selling at par value. The bonds yield 8.1 percent. The company also has 5.4 million shares of common stock outstanding. The stock has a beta of 1.16 and sells for $40.6 a share. The U.S. Treasury bill is yielding 4.8 percent and the market risk premium is 7.3 percent. Blackout's tax rate is 39 percent. What is the firm's weighted average cost of capital? (Enter answer in percents.)
2. GIMP Inc. is trying to determine its cost of debt. The firm has a debt issue outstanding with 2 years to maturity that is quoted at 101.6 percent of face value. The issue makes annual payments and has an embedded cost (coupon rate) of 9.3 percent annually. What is the firm's pretax cost of debt? (Enter answer in percents.)
3. Information on Inkscape Co. is shown below. Assume the company's tax rate is 38 percent. The firm has no debt. Common stock: 203,996 shares outstanding, selling for $95.8 per share; beta is 1.11. Preferred stock: 24,379 shares of 4.8 percent preferred stock outstanding, currently selling for $84.8 per share. Market: 8.95 percent market risk premium and 4.64 percent risk-free rate. Calculate the WACC. Enter the answer in percents.