6e

Great Seneca Inc. sells $100 million worth of 16-year to maturity 7.27% annual coupon bonds. The net proceeds (proceeds after flotation costs) are $980 for each $1,000 bond. The firm's marginal tax rate is 35%. What is the after-tax cost of capital for this debt financing?

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)

You should use Excel or financial calculator.

6g

The Black Bird Company plans an expansion. The expansion is to be financed by selling $14 million in new debt and $78 million in new common stock. The before-tax required rate of return on debt is 11.69% percent and the required rate of return on equity is 14.86% percent. If the company is in the 34 percent tax bracket, what is the weighted average cost of capital?

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)

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