1) The capital structure weights used in computing the weighted average cost of capital are based on what values of the firm (i e book, adjusted book, market, etc) Debt 50,000 bonds with 6 5 coupon rate, payable annually, $1,000 par value, 20 years to maturity, selling at 96 3 Common Stock 1,000,000 shares of common stock outstanding The stock sells for a price of $40 per share and has a beta of 1 5 Preferred Stock 150,000 preferred shares outstanding, currently trading at $120 per share with an annual dividend payment of $9 00 Market The market risk premium is 9 and the risk free rate is 3 Tax Rate 30 What is the before tax cost of debt What is the after tax cost of debt What is the company

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Question: 1) The capital structure weights used in computing the weighted average cost of capital are based on what values of the firm (i.e. book, adjusted

1) The capital structure weights used in computing the weighted average cost of capital are based on what values of the firm (i.e. book, adjusted book, market, etc):

Debt	50,000 bonds with 6.5 coupon rate, payable annually, $1,000 par value, 20 years to maturity, selling at 96.3.
Common Stock	1,000,000 shares of common stock outstanding. The stock sells for a price of $40 per share and has a beta of 1.5
Preferred Stock	150,000 preferred shares outstanding, currently trading at $120 per share; with an annual dividend payment of $9.00
Market	The market risk premium is 9% and the risk free rate is 3%
Tax Rate	30%

What is the before tax cost of debt?

What is the after tax cost of debt?

What is the company

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