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A MNE raises capital in two different countries with the following characteristics: $200,000,000 in 10-year bonds paying 7% interest with total floatation costs of $10,000,000

A MNE raises capital in two different countries with the following characteristics:

$200,000,000 in 10-year bonds paying 7% interest with total floatation costs of $10,000,000 issued in Country A where the firm pays a marginal income tax rate of 33%.

$250,000,000 in 20-year bonds paying 9% interest with total floatation costs of $12,000,000 issued in Country B where the firm pays a marginal income tax rate of 25%.

$300,000,000 in Common Stock issued in Country A where the firm's shares have a beta of .9.

$350,000,000 in Common Stock issued in Country B where the firm's shares have a beta of 1.1.

Assume all bonds are denominated and repaid in the firm's home currency.

Assume a risk-free rate of return of 3%.

Assume a rate of return on the market portfolio of 10%.

What is the companys cost of equity in Countries A and B, respectively?

What is the companys after-tax cost of debt in Countries A and B, respectively?

What is the companys estimated weighted average cost of capital (WACC)?

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