Q.8 Glasgow, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with eight years to maturity that is quoted at 103 percent of face value. The issue makes semiannual payments and has an embedded cost of 6 percent annually.

a.	What is Glasgows pretax cost of debt? (4 Points)
b.	If the tax rate is 35 percent, what is the aftertax cost of debt? (4 Points)

Q.9 Baron Corporation has a target capital structure of 70 percent common stock, 5 percent preferred stock, and 25 percent debt. Its cost of equity is 11 percent, the cost of preferred stock is 5 percent, and the pretax cost of debt is 6 percent. The relevant tax rate is 21 percent.

a) What is the company's WACC?

b) What is the after-tax cost of debt