Question: Please use the following information to answer the next TWO questions. Jacqueline Inc. has a $5 million bond issue outstanding that is selling at

Please use the following information to answer the next TWO questions. Jacqueline

Please use the following information to answer the next TWO questions. Jacqueline Inc. has a $5 million bond issue outstanding that is selling at 101.3 percent of face value. The bonds have a par value of $1,000 each, mature in 25 years, and pay annual coupons of $90. The firm also has 25,000 shares of preferred stock and 450,000 shares of common stock outstanding. The preferred stock has a market price of $36 per share compared to a price of $24 per share for the common stock. The firm's corporate tax rate is 40%. 3. What is the weight of debt in the firm? A) 30.21% B) 29.94% C) 23.16% D) 22.94% E) 27.72% 4. What is the firm's after-tax cost of debt? A) 3.55% B) 5.32% C) 8.87% D) 10.64% E) 17.74%

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