1. Suppose today is January 1, 2020; on January 1, 2010, ACC Industries issued a 30-year bond with a 9% coupon and a P1,000 face value, payable on January 1, 2040. The bond now sells for P915. Use this bond to determine the firm's after-tax cost of debt. (Assume a 34% tax rate.)

2. Suppose ACC Industries (see Problem 1) also issued a 30-year bond five years ago; it has a P1,000 face value and a 10% coupon. If the bond currently sells for P1,000, what is the after-tax cost of debt capital, as indicated by the market value of this outstanding bond?

3. Suppose five years from now the ACC bond described in the Problem 2 has a market price of P1,100. What is the after-tax cost of debt capital at that time?

4. ACC Industries just declared a dividend of P3.50 per share of common stock. The current stock price is P25 per share, and the dividend is expected to increase at a rate of 4% per year for the foreseeable future. Use the dividend growth model approach to compute the cost of equity capital.

5. Suppose the market risk premium is 8.5%, the risk-free rate is 7.0%, and ACC Industries has equal to 1.35. Use the Security Market Line (SML)/Capital Asset Pricing Model (CAPM) to compute the firm's cost of equity capital.

6. Assume the debt-equity ratio for ACC is .50. Use the data of Problems 1 through 5 to compute the WACC for ACC Industries.

7. ACC Industries has a preferred stock issue outstanding which pays an annual dividend of P3.25 per share and currently has a market price of P25 per share. Compute the cost of preferred stock.

8. Suppose ACC's capital structure is 30% debt, 10% preferred stock and 60% equity. Assume all other data as presented in Problems 1 through 7; compute the WACC.