1. When a company exchanges 100 shares of stock worth $10 each for 50 shares worth $20 each, they are using:
a.tracking stock
b. holding stock
c. an LBO
d. reverse stock split
e. split stock
2. If the weights for equity and debt and 50/50, what is the WACC for a company with a beta of 1.2 if the risk free rate is 3%, the expected return on the market is 10%, the yield to maturity on the company's debt is 7% and the tax rate is 40%?
9.2%
7.8%
10.5%
13.2%
8.8%