Der Fliegende Dackel AG $($Aktiengesellschaft$),$ an express dog food delivery service based in Frankfurt an der Oder, is considering changing its capital structure.

Its current capital structure is as follows:

$2\mathrm{.}0008\%13=1,000$

It has $2,0005\%$ annual coupon $10$ year bonds outstanding which currently trade at $85.$ The book value for these bonds is $$2\mathrm{.}0$ million.

Its common stock sells at $$20$ per share with $200,000$ shares issued and outstanding. Its par value is $$5\mathrm{.}00$ per share and $400,000$ shares are authorized. Its common stock has a book value of $$23$ per share.

It has a current beta of $0\mathrm{.}8.$ The risk$-$free rate is $4\mathrm{.}5\%,$ the market rate of return is $11\mathrm{.}0\%.$

There is no preferred stock outstanding and there are no plans to issue preferred stock.

It is subject to a $40\%$ marginal income tax rate.

a$)$ What is its current after tax cost of debt?

Gipon rate $(1-$Tax rate $)=\frac{3}{6}0\mathrm{.}6=\frac{3}{2}$

b$)$ What is its current cost of equity? List of Equity $=$ visky$-1$ ree Rate $+$ BetalMarket retarn of

c$)$ What is its total capital in dollars? What are the weightings of debt and equity to this total capital? y $1000$