Facebook just issued $100 million of 20-year zero coupon bonds. These bonds are currently priced at $225. In addition, Facebook has $30 million of Preferred Stock with a current market price of $125 per share and an annual dividend of $10 per share. Facebook has $670 million worth of common stock and just paid a dividend of $3 per share and it is expected that the dividends will grow at 4% per year from now on. Assume the market rate is 11%, and the risk- free rate of return is 3%. Facebook has a beta of 1.5 and a federal income tax rate of 21%. What is the after-tax cost of Facebook debt? a) 6% 11% c) 15% d) 7.6% What is the expected rate of return for the Facebook common stock using the Capital Asset Pricing Model (CAPM)? a) 12% b) 15% c) 11% d) 14.5% What is the current price of a share of common stock using the dividend growth model? a) $39.00 b) $37.50 c) $44.57 d) $42.86 What is the rate of return for the preferred stock? (round to the nearest percent) a) 6% b) 10% c) 4% d) 8% What is the Weighted Average Cost of Capital for Facebook using CAPM for cost of common equity? a) 13.61% b) 10.26% c) 14.70% d) 9.67%