1. Plastico. a manufacturer of consumer plastic products, is evaluating its capital structure. The balance sheet of the company is as follows (in millions): Fixed assets Debt $2,530 Current assets Equity $2,500 In addition. you are provided the following information: - The debt is in the form of longterm bonds. with a coupon rate of 1{}%. The bonds are currently rated AA and are selling at a yield of 12% [the market value of the bonds is 83% of the face value). - The firm currently has 50 million shares outstanding, and the current market price is $80 per share. The firm pays a dividend of $4 per share and has a pricefearnings ratio of 1U. - The stock currently has a beta of 1.2. The riskfree rate is 3%. 0 The tax rate for this firm is 40%. a. What is the debt'equity ratio for this firm in book value terms? In market value terms? b. What is the debtfdebt + equity) ratio for this firm in book value terms? In market value terms? c. What is the firm's after-tan cost of debt? d. What is the firm's cost of equity? e. What is the firm's current cost of capital