$1.$ Suppose that TechnoTCL is considering a new project. They are trying to determine the required rate of return for their debt and equity holders. See the information below:

$2.$ A $6\mathrm{.}5\%$ percent annual coupon bond with $15$ years to maturity, selling for $96\%$ of par. The bonds make

annual payments. What is the before tax cost of debt? If the tax rate is $30\%,$ what is the after$-$tax cost of

debt?

$3.$ The firm's beta is $1\mathrm{.}5.$ The risk$-$free rate is $4\mathrm{.}0\%$ and the expected market return is $10\%.$ What is the cost of

equity using CAPM?

$4.$ Use the balance sheet for TechnoTCL to determine the weighting for capital used by the company. What

are the weightings for long$-$term debt and common equity? Calculate the WACC for TechnoTCL.

$5.$ If the company has three possible projects with the following characteristics and has $$300,000$ available to

fund capital investments, what decision should be made for each project $($A$-$C$)?$ Why?

Possible Company Projects

Project Expected Return:

Project A $-8\mathrm{.}8\%$

Project B $-12\mathrm{.}5\%$

Project C $-9\mathrm{.}6\%$

Capital Required:

Project A $-$ $$30,000$

Project B $-$ $$150,000$

Project C $-$ $$160,000$

Please show your work.