Attempt 1 Microsoft is contemplating a purchase of TikTok, European clockmaker. TikTok has the following balance sheet and market information available: (5 thousands) Current Assets 35,000 Accs Payable Long term Debt Fixed Assets 55,000 Common Equity Common stock Paid in Capital Retained earings Total Assets 90,000 Total Liab. & Equity 10,000 35,000 1,500 4,500 39,000 90,000 Current Market Rates: Current Market Prices & Other Info: 1 yr Tbill rate 10 yr Tbond Rate Market Risk Premium Tax rate 2.00% 3.35% 5.00% 25% TikTok Debt YTM Microsoft Debt YTM Microsoft Yahoo Beta Tiktok Yahoo Beta 8% 6% 1.10 1.85 The current liabilities consist entirely of accounts payable and accruals. TikTok bonds are selling at 100% of par and it has 1.5 million shares of equity stock outstanding. Microsoft believes a D/E ratio of 1.51 is more appropriate for TikToks debt level after the acquisition Show ALL work on your spreadsheet. Estimate TikTok's after-tax cost of debt. 3.75% hono