18. Coleman Technologies Inc. is estimating its WACC

Tax rate = 40%.

Debt value: $15,000. Par value $1,000, 15-year, 12% coupon, semiannual payment bonds sell for $1,153.72.

Shares outing standing: 1000 shares with $35/share. Beta = 1.2; Risk-free rate = 7%; Market risk premium = 6%. Use the above information to answer Q1-4

Q1) What is the company's bond YTM?

a)11.5%

b)10%

c)9.5%

d)9%

Q2)What is the company's after-tax cost of debt?

a)6.6%

b)5.4%

c)6%

d)5.7%

Q3) What is the company's cost of equity?

a)14.2%

b)15.3%

c)13.9%

d)12.5%

Q4) What is the company's WACC

a)10.65%

b)12.53%

c)11.74%

d)13.21%