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A firm has three sources of debt capital: ( i ) 3 - year, 6 % $ 1 0 0 0 coupon bonds each currently

A firm has three sources of debt capital: (i)3-year, 6% $1000 coupon bonds each currently
trading at 104. The firm has 0.5M coupon bonds (ii)0.6M,15-year zero-coupon bonds each currently
trading at 45.6.(iii) a $200M,5%10-year bank loan. The tax rate is 25% and interest is compounded semi-annually for both bonds. The beta is 1.25, risk free rate 3.5% and market risk premium 6%. The firm has 8 million common stocks each trading at $125.
a) Compute Kd(1-T) for the coupon bond.
b) Compute Kd(1-T) for the zero-coupon bond.
c)Compute Kd(1-T) for the bank loan.
d)Compute the WACC.

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