Question 1 (total of 12 marks): Moby Ltd has provided you with the following information. All rates are effective annual rates. Assume a classical tax system.

• The company has bonds on issue with a face value of $1,000 that currently pay a coupon of $60 every six months. These bonds currently trade at par.
• 10-year Government Bonds yield 2% and the market risk premium is 5% pa.
• The beta of the companys equity is 1.5
• The debt-to-equity ratio is 2.3:1
• The corporate tax rate is 30%

question 1d (3 marks): Calculate the companys after-tax WACC. Give your answer as a decimal thats correct to 6 decimal places or more. So, for example if your answer is 1.23456789%, you can write 0.012346.