a. What is the after-tax cost of debt for Qinetiq bonds?

b.According to the CAPM, what is the required return of Qinetiq shareholders?

c.What is the weighted average cost of capital (WACC) for Qinetiq?

Qinetiq plc. makes full body scanners for airport security systems. The Transportation Security Administration (TSA) is considering ordering 100 such machines at a total cost of S20 million. To ramp up production for the order Qinetiq is considering building a new factory. To evaluate the new factory project, Qinetiq needs to estimate its cost of capital. Review the following information and answer the questions that follow to help Qinetiq with its analysis. Debt Number of bonds outstanding150,000 Face value- Maturity Coupons Market price Tax rate $1,000 4 years 10% paid annually $1,025.53 30% Equity Market price- Shares outstanding Beta- Risk-free rate- Expected return on market $46 5 million 1.37 4% 10%