Phenix Inc has the following capital structure: Debt: 10% semiannual coupon bonds with a par value of $1,000. There are 40,000 bonds. Each bond is priced at $1,050 and has 20 years to maturity. Preferred Stock: 5% shares currently priced at $110 per share. There are 150,000 shares outstanding, and each share has a $100 par value. Common Stock: There are 2,500,000 shares. Each share is currently priced at $55. The stock has a beta of 1.25. Market information: The corporate marginal tax rate is 40%, the return on the market is 12% and the risk-free rate is 4%.

A.What is Phenix's weighted average cost of capital?

B.What is Phenix's cost of common stock?

C.What is Phenix's cost of preferred stock?

D.What is Phenix's AFTER TAX cost of debt?

E.What is one of the reasons for applying a tax adjustment to cost of debt when determining a corporation's weighted average cost of capital?