1. A financial analyst collected some data about a company, which has two sources of financing: debt (25%) and equity (the rest). The firm's bonds yield 7% and the company's tax rate is 35%. The risk-free rate is 1.50%, the market risk premium is 5% and the stock's beta is 0.8. Find the company's WACC.
2. You are borrowing money to buy a car. If you can make payments of $260 per month starting one month from now at an interest rate of 99?%, how much will you be able to borrow for the car today if you finance the amount over 4 years?