Cost of Capital Assignment cos Assignment: Determine g The after-tax cost of equity funding? g The after-tax cost of long-term debt funding? 8 The book value weights? g The marginal or market value weights? g The after-tax weighted average cost of capital (WACC) at book value? 8 The after-tax weighted average cost of capital (WACC) at market value? CB Marginal Tax Bracket: 21\% cos Equity Information cos50 million shares cos Issued with \$40 Par value 03 Sold at $40 per share, no excess co Market Price: $80 per share cogD0=$5.15 cos Growth Rate =5.0% co Flotation Cost =9.0% 8 Retained Earnings =$1 billion cos Debt Information co $1 billion in outstanding debt cos$1,000 face value per bond 3 Current quote =110 cog Coupon rate =9%, semiannual coupons cos15 years to maturity c) Flotation Cost =2%