a. Why is the after-tax cost of debt, rather than its before-tax required rate of return, used to calculate the weighted average cost of capital?

b. How can the WACC be both an average cost and a marginal cost?

c. A company's 6% coupon rate, semiannual payment, $1,000 par value bond that matures in 30 years sells at a price of $515.16. The company's federal-plus-state tax rate is 40%. What is the firm's after-tax component cost of debt for purposes of calculating the WACC?