1. A company desires to have $5,000,000 in debt and $20,000,000 in common equity outstanding. The firm does not have preferred stock outstanding. What is the target capital structure weight for debt?
2. A firm has a WACC of 9.5%. The firm can fund the following investment. Project X with an expected return of 10% and Project Y with an expected return of 9.5%. Which projects will the firm choose?
A. Only Project Y
B. Neither Project.
C. Only Project X
D. Both Project X and Project Y