Use the following data to answer questions:
Company issued 240,000 bonds with $1k face value with 7.5% coupons with yearly payments. 20 yrs. to maturity,& currently sells for $940. The Marginal tax rate is 40%. Equity is 9M shares, selling for $71@share, beta is 1.2, risk free rate 1%,& market risk premium is 10%.
A. What percent of the company’s financing is debt?
B. What percent of the company’s financing is equity?
C. What is the after-tax cost of debt?
D. What is the cost of equity?
E. What is the company’s weighted average cost of capital?