Company Agile has 221 000 shares outstanding with the book value of $4. The shares are listed in stock exchange and currently trade at the level of P/B=3.0. The risk free interest rate is currently 2% and the market market return is expected to be 10%. The company has higher than average systematic risk, which is reflected in the value of beta, which is 1.40.

Moreover, the company has just issued 2 568 discount bonds which mature in exactly 6 years. The face value of these bonds is 1 000 EUR but the current market price is $778.82. The corporate tax rate is 21%.

Find:

1. Market value of equity and cost of equity
2. Market value of debt and the after-tax cost of debt. (If you were unable to find the cost of debt, use 3%)
3. Estimate the cost of capital
4. Should the company invest into the new investment project which has IRR=9%