Micro Spinoffs Inc. issued 10-year debt a year ago at par value with a coupon rate of 6%, paid annually. Today, the debt is selling at $1,080. If the firms tax bracket is 35%, what is its percentage after-tax cost of debt? Assume a face value of $1,000

Question #2

Reactive Industries has the following capital structure. Its corporate tax rate is 20%.

Security	Market Value	Required Rate of Return
Debt	$10 million	6%
Preferred stock	20 million	8
Common stock	50 million	12

What is its WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

WACC

%