Question: Firm A A A sold a noncallable bond now has 20 years to maturity. 9.25% annual coupon rate, paid semiannually, sells at a price $1,075,

Firm A A A sold a noncallable bond now has 20

Firm A A A sold a noncallable bond now has 20 years to maturity. 9.25% annual coupon rate, paid semiannually, sells at a price $1,075, par S 1,000. Tax rate 40%, calculate after tax cost of debt (answer: 5.08%) 2. Firm A A A's equity condition is as follows. D $1.25. Pi = S27.50:-= 5.00%; and Flotation 6.00% of price. Calculate ost of equity (answer: 9.3496) Fim AAA raised 10m from the capital market. In it, 3m is from the debt market and the rest from the equity market. Calculate WACC. (answer: 8.4106)

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