3. Chapter 14: Cost of Capital A company raises capital from different sources to finance its operations. Details are listed below: - 1,000 units of 7% semiannual coupon bonds, and the bond is priced to yield 5% (semiannually compounded APR) with 5 years to mature. - 40,000 shares of common stocks, and the market price of this stock is $45 per share with a beta of 1.6 - 4,000 shares of preferred stocks with a 6% dividend yield on a face value of $100 per share. The current stock price is $50 per share. Suppose the risk-free rate is 4.5%, and the return on TSX Composite Index is 9.3%. What is the current price of the bond? What is the market risk premium? And what is the weighted average cost of capital for this company? Assume the tax rate is 34%