Question 8: (20 points -5+5+5+5) Smiley's has 10,000 shares of stock outstanding at a market price of $52 a share. The beta of Smiley's is 1 and market risk premium is 5%. The risk free return is 3.6%. The firm just issued $90,000 of zero-coupon bonds. For each $1,000 (Face Value) bond, the price is $952 and the number of years to maturity is 2. The tax rate is 35%. a. Calculate cost of debt b. Calculate cost of equity Calculate after tax WACC It decides to merge another company. In order to finance this transaction, the firm decides to issue $50,000 (market value) of preferred stocks. The company promises a 6% of coupon. Please calculate the new WACC (after tax). C. Car d. It den