Blackboard 4 XCO Remaining Time: 1 hour, 33 minutes, 19 seconds. Question Completion Status: 1 2 4 Question 3 10 points Alloy Wheels inc. is a manufacturer of premium car wheels. It is considering to invest in a new production line which will cost $10m. The finance director of the company decided that a bond is is the best way to finance the project. Based on current market conditions, the bond issue will have 7-years to maturity, with a coupon of per year. The par value of the bond will be $1.000 per bond. The bond would be priced at 115 percent of its par value. The company pays a corporation tax rate of 40 percent. Furthermore, the stock market return offers and the risk free rate pays 1.5. The beta of the company is 1.5. Required: A Calculate the cost of debt for the company before tax? (4 marks) B. Calculate cost of equity. (6 marks) Note: Show your workings and use two decimal points in your calculations TT TT Paragraph Arial gi 3 [12pt) E. E T... TT .-- Words Pathi