En pins manufacturing has 9.1 million shares of common stock outstanding. the current share price is $61, and the book value per share is $3. the company also has two bond issues outstanding. the first bond issue has a face value of $71.6 million and a coupon rate of 7.8 percent and sells for 107.5 percent of par. the second issue has a face value of $61.6 million and a coupon rate of 8.3 percent and sells for 110.5 percent of par. the first issue matures in 7 years, the second in 28 years. the company’s stock has a beta of 1.1. the risk-free rate is 3.9 percent, and the market risk premium is 7.8 percent. assume that the overall cost of debt is the weighted average implied by the two outstanding debt issues. both bonds make semiannual payments. the tax rate is 34 percent. what is the company’s wacc?

Magic realm, inc., has developed a new fantasy board game. the company sold 15,000 games last year at a selling price of $20 per game. fixed expenses associated with the game total $182,000 per year, and variable expenses are $6 per game. production of the game is entrusted to a printing contractor. variable expenses consist mostly of payments to this contractor.required: 1-a. prepare a contribution format income statement for the game last year.1-b. compute the degree of operating leverage.2. management is confident that the company can sell 58,880 games next year (an increase of 12,880 games, or 28%, over last year). given this assumption: a. what is the expected percentage increase in net operating income for next year? b. what is the expected amount of net operating income for next year? (do not prepare an income statement; use the degree of operating leverage to compute your answer.)