and the company's tax rate is

35%

. What is the company's after tax cost of debt?\ a.

5.28%

\ b.

,5.46%

\ c.

5.18%

\ d.

5.75%

\ Part 2: Problem questions (show your calculation)\ Chelsea Enterprises stock trades for

$50

per share. It is expected to pay a

$3

dividend at year\ end

(D_(1)=$3)

, and the dividend is expected to grow at a constant rate of

5%

a year. The\ before-tax cost of debt is

8.00%

, and the tax rate is

40%

. The target capital structure consists\ of

40%

debt and

60%

common equity. What is the company's WACC if all the equity used is\ from retained earnings?