PLEASE HELP ME WITH #5

(1) Company BW has issued 25,000 zero-coupon bonds with a face value of $1,000. Those bonds will mature in 8 years and the current market price is $576.18 per bond. Investors use semi-annual compounding for bonds.

Marginal corporate income tax rate is 20%, find the annual after-tax effective cost of debt. [4 points]

(2) Company BW has borrowed $3,200,000 from a bank. The nominal interest rate is 6.6% and BW is making monthly payment.

Find the annual after-tax effective cost of bank loan. [4 points]

(3) Company BW has 600,000 shares of preferred stock outstanding. The par value is $10 and dividend rate is 12% per year. Dividends are paid every quarter and the current market price of the preferred is $8.76 per share.

Find the annual effective cost of preferred stocks. [4 points]

(4) Company BW has 10,000,000 shares outstanding and the market price is $12.27 per share. Annual dividend just paid was $0.75 per share and investors believe future dividends will be increasing by 7% annually. What is the cost of common stocks? [4 points]

(5) Find the overall (annual) cost of capital for BW (WACC), based on questions 4.14.4. [5 points]