Total Scenario 1 $5,000,000

Total Scenario 1 $5,000,000.00 1,200,000.00 1.800,000.00 $8,000,000.00 Scenario 2 $2,000,000.00 2,200,000.00 3,800,000.00 $8,000,000.00 Cost of Capital 8% 10% 13% 1-a. Complete the table below to determine the WACC for each of the two capital structure scenarios. (Enter your answer as a whole percentage rounded to 2 decimal places (e.g. .3555 should be entered as 35.55).) Scenario 1 Weight % Scenario 2 Weight % Scenario 1 Scenario 2 Weighted Cost Weighted Cost Cost of Capital Tax Rate Debt 30% Preferred Stock Common Stock Total 8% 10% 13% 0.00% 0.00% 1-b. Which capital structure shall Mr. Johnson choose to fund the new project? O Scenario 1 Scenario 2