1. A company is looking to invest in new production machinery. The market value of common stock is $44 million, the market value of preferred stock is $9 million, and the market value of total debt is $33 million. Analysts have calculated the cost of common equity to be 16%, the cost of preferred equity to be 12%, and the cost of debt to be 9..5%.

What is the weighted average cost of capital if the marginal tax rate is 34%?

Round your answer to two decimal places.

A. 9.88%

B. 10.41%

C. 12.33%

D. 14.51%

E. 11.85%

2. Suppose I invest a lump amount of $6302.00 with a promised nominal rate of 3.57% per year. If interest compounds quarterly what is the expected future value in 5 years?