finance i have a case study with the solution attached Requirement : can you please show me the steps of answering the 6 questions use simple English language and the steps of financial calculator thank you

Solutions to Mini-Case BioCom, Inc.: Part 3, A Fresh Look at the WACC This case provides a comprehensive and realistic review of WACC computations .and some of the theoretical questions related to the WACC and its uses Compute the yield to maturity and the after-tax cost of debt for the two bond issues. Bond 1 $1031 = 35 (1-(1/(1+YTM/2)12)/r)+1000/(1+YTM/2)12 By trial and error, YTM/2 =3.185%. YTM = Rd = 6.37% .1 Using a calculator, N=12, PV = -1031, PMT = 35, FV = 1000, solve for i/y = 3.185% Bond 2 $1035 = 40 (1-(1/(1+YTM/2)32)/r)+1000/(1+YTM/2)32 By trial and error, YTM/2 =3.81%. YTM = Rd = 7.62% Using a calculator, N=32, PV = -1035, PMT = 40, FV = 1000, solve for i/y = 3.81% .Compute BioCom's cost of preferred stock .2 Rps = $1.50/$19 = 7.89% Compute BioCom's cost of common equity. Use the average of results from .the dividend growth model and the security market line .3 Dividend Growth model Re= $2.50 (1.06)/35 + .06 = 13.57% :CAPM approach Re = 3% + 1.2(12%-3%) = 13,8% :Average 13.69% = 2/(13.8% + 13.57%) Compute BioCom's weighted average cost of capital. Should you use book ?values or market values for this computation .4 It is always best to use market weights when computing the Weighted Average Cost of Capital. Also keep in mind that we need to adjust Rd for .taxes WACC = .15(6.37%)(1-.34) +.20(7.62%)(1-.34) + .10(7.89%) + .55(13.69%) = .631% + 1.006% + .789% + 7.530% = 9.96% BioCom could sell new bonds with maturities of fifteen to twenty years at approximately the same yield as Bond 2. It would, however, incur flotation costs of $20.00 per $1,000 of par value. Estimate the effective interest rate .BioCom would have to pay on a new issue of long-term debt BioCom would most likely issue bonds with coupon rates to reflect investors current expected yield to maturity, or about 7.62%. This would result in semiannual coupon payments of $1,000 .0762/2 = $38.10. BioCom would also realize only $980 ($1,000 - $20 flotation cost) per bond unit issued. Assuming the bonds were issued with a 20 year maturity, the effective Rd would be YTM/2)40)/r)+1000/(1+YTM/2)40 By trial and error, +1)/1)-1) 38.10 = $980 YTM/2 =3.91%. YTM = Rd = 7.82% .5 Using a calculator, N=40, PV = -980, PMT = 38.10, FV = 1000, solve for i/y = 3.91% Some of BioCom's projects are of low risk, some average risk, and some high risk. Should BioCom use the cost of capital to evaluate all of its projects, or ?adjust the discount rate to reflect different levels of risk It is common practice to adjust the discount rate used in capital budgeting upward to reflect the higher rate of return required as compensation for higher levels of risk. The adjustment is usually subjective. It is theoretically preferable to find project betas and use them to recalculate the WACC for the specific project. One way to do this is to find companies whose business is similar to the project and use their beta. In practice, such \"pure play\" .comparisons are quite difficult to find .6