31. American Dental Laser is selling a 10 year $1,000 face value bond with a 8% coupon rate. Interest is paid annually. The price to the public is $820 and the issue costs per bond are $10 each. Compute the pretax cost of debt for these bonds. (Points : 3) 11.1% 11.3% 11.5% 11.8%

Question 32. 32. Kevin John Wright Express(KJWE) has a capital structure of 30% debt and 70% equity. KJWE is considering a project that requires an investment of $2.6 million. To finance this project, KJWE plans to issue 10-year bonds with a coupon interest rate of 12%. Each of these bonds has a $1,000 face value and will be sold to net KJWE $980. If the current risk-free rate is 7% and the expected market return is 14.5%, what is the weighted cost of capital for KJWE? Assume the company has a beta of 1.20 and a marginal tax rate of 40%. (Points : 3)

14.9% 12.4% 13.4% 16.0%

Question 33. 33. The most appropriate weights to use in calculating a firm's cost of capital are the proportions of the components in the firm's ____ capital structure. (Points : 3)

historical average long-range target current industry average