1. To help finance a major expansion, Castro Chemical Company sold a noncallable bond several years ago that now has 20 years to maturity. This bond has a 9.25% annual coupon, paid semiannually, sells at a price of $828.36, and has a par value of $1,000. If the firm's tax rate is 40%, what is the component cost of debt for use in the WACC calculation?

a. 4.35%

b. 4.58%

c. 4.80%

d. 5.08%

e. 5.33%'

2. An insurance firm agrees to pay you $3,306.66 at the end of 20 years if you pay premiums of $100 per year at the end of each year for the 20 years. Find the IRR to the nearest whole percentage point.

a. 9%

b. 7%

c. 5%

d. 3%

e. 11%

Please do not copy From Chegg. Otherwise i have to report the answer.