Question 7 (4 points) Firm Fantastic's bond is quoted in the market at 95, with semi-annual payment of coupons. The annual coupon rate is 10%, term to maturity of 5 years. The firm only has this one bond issue outstanding. What is the Firm Fantastic's cost of debt? 10% 11.34% 8.55% 15% Question 8 (4 points) One firm has debt worth $5 million, equity worth $15 million, cost of debt 6%. Its stock issues dividend regularly at $5 a year per share forever, and stock price at $50 per share. Tax rate is 15%. What is the after-tax weighted average cost of capital for this firm? 12% 15% 5.63% 9702