Question: Please show how to solve in Excel Task 2: Weighted Average Cost of Capital (WACC) (Use the template on sheet Task 2-WACC to answer the

Task 2: Weighted Average Cost of Capital (WACC) (Use the template on sheet Task 2-WACC to answer the Questions 7 to 11.) You are given the following information for Avalon Co. Assume the company's tax rate is 21%. Debt 55,000 bonds outstanding with 8.5% coupon rate, $1,000 par value, 17 years to maturity, selling for 95% of par; the bonds make semiannual payments. Common stock: 1,500,000 shares outstanding, selling for $45 per share; the beta is 1.15. Preferred stock: 150,000 shares of preferred stock outstanding at a market price of $82 a share that pays $6.25 dividends annually per share Market: 6% market risk premium and 4% risk-free rate. Questions: 7. What is the total market value of the company? (5 points) 8. What is the company's after-tax cost of debt? (6 points) 9. What is the company's cost of common stock? (5 points) 10. What is the company's cost of preferred stock? (5 points) 11. What is the company's WACC? (7 points) Input area: 55,000 Debt Bonds outstanding Settlement date Maturity date Annual coupon rate Face value ($) Bond price (% of par) Coupons per year Years to maturity Common stock Shares outstanding Beta Share price ($) Preferred stock Shares outstanding Preferred stock dividends Share price ($) Market Market risk premium Risk-free rate Tax rate
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