(a) Swift plc has 10,000 shares. The current share price is 40, and the cost of equity is 13%.The company has also 1,000 bonds outstanding, with 13 years to maturity, a coupon rate of 8% and a face value of 1,000. The bonds make semiannual coupon payments and the current price is 856.25 per bond. The tax rate is 20%. What is the weighted average cost of capital (WACC) of the company?

(b) The Pizza Company hasearnings before interest and taxes (EBIT) of 50,000 and market value debt of 100,000 outstanding with a 9% coupon rate. The cost of equity for an all equity firm would be 14%. The corporate tax rate is 35% and investors face a 20% tax rate on interest income and a 15% rate on dividend income. What is the value of Pizza Company's equity?

(c) Kelly Corporation is considering a two-year project. The net present value (NPV) of the project if it is all-equity financed is -2,000 (negative). Kelly can also use a 200,000 bank loan to finance the project. The bank loan calls for annual fixed principal repayment. The corporate tax rate is 30%, and the cost of debt is 6% per annum. Assume that the debt is risk free. What is the adjusted present value (APV) of this project if the bank loan is used?