alculation of individual costs and WACC$$ Carnival Corporation$($CCL$)$ recently sold new bonds at discount price of $ $955\mathrm{.}28.$ The bonds have a short $6-$year $$maturity$,$ have a coupon rate of $12\mathrm{.}50\%,$ and pay interest$$ semi$-$annually. In addition to the $$$$9\mathrm{.}403$ billion worth of bonds$$ outstanding, Carnival also has $$$$12\mathrm{.}528$ billion worth of common stock equity outstanding. According to$$ Yahoo! Finance,$$ Carnival's stock has a beta of $1\mathrm{.}74.$Currently$,$ the expected return on the market portfolio and$$ risk$-$free rate$$ are, $5\mathrm{.}60\%$ and $0\mathrm{.}76\%,$ respectively.

a$.$Calculate the market value weights for$$ Carnival's capital structure.

b$.$Calculate$$ Carnival's cost of equity using the CAPM.

c$.$Calculate$$ Carnival's before$-$tax cost of debt.

d$.$Calculate$$ Carnival's current WACC using a $21\%$ corporate tax rate.

Question content area bottom

Part $1$

a$.$ The market value weight of$$ long$-$term debt in$$ Carnival's capital structure is

$$

$42\mathrm{.}88\%.($Round to two decimal$$ places.$)$

Part $2$

The market value weight of common stock equity in$$ Carnival's capital structure is

$$

$57\mathrm{.}12\%.($Round to two decimal$$ places.$)$

Part $3$

b$.$Carnival$\text{'}$s cost of equity using the CAPM is

$$

$9\mathrm{.}18\%.($Round to two decimal$$ places.$)$

Part $4$

c$.$Carnival$\text{'}$s before$-$tax cost of debt is

$$

$6\%.($Round to two decimal$$ placesccdfg