4. Cost of capital The company has 221 000 shares outstanding with the book value of $4. The shares are listed in stock exchange and currently trade at the level of P/B-3.0. The risk free interest rate is currently 2% and the market risk premium is estimated to be 6%. The company has higher than average systematic risk, which is reflected in the value of beta, which is 1.50. higher than value of beta, which is 1.50. Moreover, the company has just issued 2 568 di value of these bonds is 1 000 EUR but the current market price is $778.82. The corporate tax rate is 34%. unt bonds which m Find: a) Market value of equity and cost of equity Market value of debt and the after-tax cost of debt. (If you were unable to find the cost of debt, use 396) Estimate the cost of capital b) c) to the new investment project which has IRR 996