answer bottom question. #5 please. answer neatly and show work. preferably not on excel. thank you!

- Be able to explain the Capital Asset Pricing Model. (1) Company BW has issued 2,000 corporate bonds with a maturity value of $1,000 and a coupon rate of 6%. Coupon payments are made every 6 months and those bonds will mature in 6 months from today. Current market price of those bonds is $978.56. Marginal corporate income tax rate is 34%, find the annual after-tax cost of debt for these bonds. [ 15 points] *** HINT: What have you found? Semi-annual rate or annual rate? (2) Company BW has $500,000 loan outstanding. The annual loan interest rate is 6% with monthly compounding (meaning BW is making monthly payments). Find the annual after-tax cost of debt for the loan. [10 points] (3) Company BW has issued 2,000 preferred stocks. The par value is $100, dividend rate is 8%, and dividend is paid at the end of each year. Market price is $85 a share. Find the annual cost of preferred stock. [ 10 points] (4) Company BW has 50,000 shares outstanding and the market price is $23 per share. People believe this company is twice as risky as the stock market. Current T-bill rate is 3% and expected stock market return this year is 9%. What is BW's annual cost of equity? [ [15 points] (5) Find the overall (annual) cost of capital for BW (WACC). [20 points]