Cost of Capital: Homnework Problems The following is a condensed market value balance sheet for Twitter 1 $15,000,000 $ 6,000,000 S 9,000,000 Total assets Total debt Total equity twitter What is Twitters cost structure (i.e., percent debt and equity)? Twitter is able to sell $4,000,000 of 15-year 9 % coupon 2. bonds (annual interest payments) at $985 per bond. After these bonds are sold, Twitter can sell an additional $3,000,000 of 8-year 10 % coupon bonds (annual interest) at a price of $930 per bond. Twitter's marginal tax rate is 25%. What is Twitter's after tax cost of debt at the two borrowing rates? eister 3 selling for $20. Twitter's stock price and dividend are expected to grow at a constant 3 %. Using the dividend growth model, what is the cost of Twitter's internal equity? Twitter plans to pay a dividend of $1 next year and it's stock is currently 3 Twitter has a Beta value of 0.98. The risk free rate of interest is 0.89% and the anticipated market rate of return is 7.13 %. Using the CAPM, what is the cost of Twitter's internal equity? Calculate Twitter's weighted average cost of capital for the first $4,000,000 of debt and the second $3,000,000 of debt