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Ginetiq plc. makes full body scanners for airport security systems The Transportation Security Administration (TSA) is considering ordering 100 such machines at a total cost

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Ginetiq plc. makes full body scanners for airport security systems The Transportation Security Administration (TSA) is considering ordering 100 such machines at a total cost of $20 million To ramp up production for the order Qinetiq is considering building a new factory. To evaluate the new factory projoct, Qinetiq needs to estimate its cost of capital Reviow the following information and answer the questions that follow to help Qinetiq with its analysis Debt Equity Market price Shares outstanding Beta - Risk-free 'ate m Expected return on market Number of bonds outstanding 100,000 S46 5 million 1.48 Face value- Maturity = Coupons Market price = Tax rate $1,000 6 years 10% paid annually $1,016.15 32% 13% a. What is the after-tax cost of debt for Qinetiq bonds? % (Round to two decimal places) b. According to the CAPM, what is the required return of Qinetiq shareholders? % (Round to two decimal places ) c. What is the weighted average cost of capital (WACC) for Qinetiq? % (Round to two decimal places.)

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