Question: Tiny Tots has debt outstanding, currently selling for $900 per bond. It matures in 20 years, pays interestannually, and has a 11% coupon rate. Par

Tiny Tots has debt outstanding, currently selling for $900 per bond. It matures in 20 years, pays interestannually, and has a 11% coupon rate. Par is $1,000, and the firm's tax rate is 38%. What is the after-tax cost of debt?

If the WACC for the health care division is 8% and the WACC for the paper products division is 4%, assuming each division is the same size, what WACC would you use to evaluate the purchase of a new line of paper towels?

A. the lowest cost of 4% because this is a safe investment

B. the highest cost of 8% to be conservative

C. the average cost of 6%

D. the cost of the paper products division of 4%

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