Colculauing Weighted Average Cost of Capital and Economic Value Added (EVA) Ighacio, Inc, had after-tax operating income last vear of $1,197,000. Three sources of financing were used by the company: $2 milion of mortgage bonds, paying 4 percent interest, $4 million of unsecured bonds paying 6 percent interest, and $9 million in common stock, which was considered to be relatwoly fisky (with a risk premium of 8 percent). The rate on long-term treasunes is 3 percent, Ignacio, Inc, pays a marginal tax rate of 30 percent. Required: 1. Calculate the after-tax cost of each method of financing. Enter vour answers as decimal values rounded to three places. For example, 4.36% would be enteres as ".044". Martoagebonds Unsecured bonds ciommon stock. 2. Calculate the weiphted average cost of captal for Ignacio, the. Round Intermediate calculations to four decimal places, Round your final anawer to four decimal places before converting to a percentape. For example, .06349 would be rounded to .0635 and entered as " 0.35 " percent. Calculate the totar doliar amount of capital enploved for fonacio, ine. 3. Caiculate economic value added (EVA) for lgnacio, the, for last year, if the EVA is negative, eater your answer as a negative amount. Is the comodn creating or destroying wealth? 3. Calculate economic value added (EVA) for Ignacio, Inc., for last vear, If the EVA is negative, enter your answer as a negative amount. Is the company creating or destroying wealen? 4. What if Ignocio, Inc, nad common stock which was less risky than other stocks and commanded a risk premium of 5 percenct how would that affect the welghted average cost of capital? What is the new EVA? In your calcutations, round weighted average percentage cost of capital to four decimal places. If the EVA is negative, enter your answer as ar negative amount. x Veninis: 1. Aher-tax cont = infecest rate - [Tak rate interest Rate) fourcels weighted cost. ASd all the weighted costs together to determine the weighted merage colt of captal