1) Determine the weighted-average cost of capital for firm with given sources of funds and corresponding required rates of return: $5 million common stock at= 16%, $500,000 favoured stock at 10%, and $3 million debt at 9%. All amounts are given at market values and the firm's tax rate is= 35%
2) Assume that LIBOR rates for maturities of one, two, three, four, five, and six months are= 2.6%, 2.9%, 3.1%, 3.25%, and 3.3% with continuous compounding. prepare down the forward rates for future one-month periods?
3) The interest rate is quoted as= 5% per annum with semi-annual compounding. What is the equivalent rate with monthly compounding.