1. The Russian crisis of 1998

a) was a result of a sharp price increase of Russian export commodities.

b) ended when President Yeltsin announced there will be no devaluation.

c) occurred because of the inability of the Russian Government to lower the taxes.

d) was a culmination of continuing deterioration of economic conditions.

2. Taylor s has a beta of .78 and a debt-to-equity ratio of .2. The market rate of return is 10.6 percent, the tax rate is 34 percent, and the risk-free rate is 1.4 percent. The pretax cost of debt is 6.1 percent. What is the firm's WACC?

8.08%

7.67%

8.16%

9.96%

7.82%