1. Team Sports has 5.9 million shares of common stock outstanding, 3.9 million shares of preferred stock outstanding, and 39 thousand bonds. If the common shares are selling for $4.90 per share, the preferred share are selling for $16.9 per share, and the bonds are selling for 98.81 percent of par, what would be the weight used for equity in the computation of Team's WACC?

a) 33.33%

b) 27.68%

c) 59.97%

d) 21.68%

2. Hollywood Shoes would like to maintain their cash account at a minimum level of $60,000, but expect the standard deviation in net daily cash flows to be $5,000; the effective annual rate on marketable securities to be 6.00 percent per year; and the trading cost per sale or purchase of marketable securities to be $200 per transaction. What will be their optimal upper cash limit? (Round your answer to the nearest dollar amount.)

a) $65,000

b) $81,520.79

c) $145,915.53

d) $84,693.12