1. We have three estimated cost for each component of capital for Ray Corporation.One of the financing components cost 4% the other cost 8%. One of these financing components is debt issued by the corporation and the other is common equity originally issued by the corporation years ago when it went public in its initial public offering.Which one is the after-tax cost of debt and which one is the after-tax cost of common equity?Why?

2. Marshall Corporation is financed as follows:

--60,000 ten-year bonds with market values of 92% of face value of $1,000.

--80,000 shares of preferred stock trading in an active market at $16 per share

--1,000,000 shares of common stock trading in an active market at $23 per share

--The bonds pay $60 interest payments annually, have a face value of $1,000 and trade in the market at $940

--Marshall is in the 27% marginal tax bracket

--The preferred stock pays a $2.20 dividend with no growth.

--The common stock has a beta of 1.3, the risk-free rate is 3.5%, and the market risk premium is 6%.

From the given information above, what is the weighted average cost of capital for Marshall Corporation