1. Calculate the rate at which a firm can grow without changing its leverage if its payout ratio is 75%, equity outstanding at the beginning of the year is $970,000, and its net income for the year is $157,000. (Do not round intermediate calculations.)
16.19%
12.14%
4.05%
13.05%
2. What is the WACC for a firm with 45% debt and 55% equity that pays 12% on its debt, 20% on its equity, and has a 40% tax rate? (Do not round intermediate calculations.)
14.24%
13.16%
16.40%
12.00%