Tax rate 30% Riskfree rate 1.6% Market rate 7.8% 8. What is the yield to maturity on the bond issue? 9. What percentages do the loan and bond issue contribute to the firms total debt? 10. Find the after-tax weighted average cost of debt. 11. What is cost of common stock? 12. What is the market value of the common stock? 13. What are the percentages of debt and equity in the firms capital structure? 14. What is the firms weighted average cost of capital?

$5,000,000 0.05 Loan Amount Interest rate Bond issue 7 yr. AAA rated Number issued Price per bond Common stock Beta 1.40 Shares outstanding 2,000,000 Price per share $9.45 7,500 $1,010