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Exhibit 10.1 Assume that you have been hired as a consultant by CGI, a major producer of chemicals and plastics, inclading plastic grocery bags, styrofoam cups, and fertilizets, to estimate the firm's weighted average cost of capital. The balance sheet and some other information are provided below. Assets The stock is currently selling for $17.75 per share, and its noncallable $3.319.97 par value, 20year,1.70% bonds with semiannual payments are selling for 5881.00 . The beta is 1.29, the yield on a 6-mooth Treasury bill is 3.50%, and the yield on a 20 -year Treasury bond is 5.50%. The required return on the stock market is 11-50\%, but the market has had an average annual return of 1450% during the past 5 years. The firm's tax rate is 40%. Refer to Exhibit 10.1. Which of the following is the best estimate for the weight of debt for use in calculating the WACC? a. 17.23k b. 18.64n c. 17.92s d. 1656m e. 12.57k Exhibit 10.1 Assume that you have been hired as a consultant by CGI, a major producer of chemicals and plastics, inclading plastic grocery bags, styrofoam cups, and fertilizets, to estimate the firm's weighted average cost of capital. The balance sheet and some other information are provided below. Assets The stock is currently selling for $17.75 per share, and its noncallable $3.319.97 par value, 20year,1.70% bonds with semiannual payments are selling for 5881.00 . The beta is 1.29, the yield on a 6-mooth Treasury bill is 3.50%, and the yield on a 20 -year Treasury bond is 5.50%. The required return on the stock market is 11-50\%, but the market has had an average annual return of 1450% during the past 5 years. The firm's tax rate is 40%. Refer to Exhibit 10.1. Which of the following is the best estimate for the weight of debt for use in calculating the WACC? a. 17.23k b. 18.64n c. 17.92s d. 1656m e. 12.57k

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