The balance sheet for HBC Corp. for the year ending 2019 is given below. All numbers are in millions of dollars.

Assets Liabilities and owners equity

Current assets $18 million Current liabilities $10 million

Gross fixed assets $100 million Long-term debt (Bonds) $20 million

Net fixed assets $82 million Equity

Total assets $100 million Common stock ($0.50 par) $20 million

Paid-in capital $20 million

Retained earnings $30 million

Total equity $70 million

Total liabilities plus owners equity $100 million

The firms common stock is trading at $10 per share and the bonds are trading at $890.84 each. The stock paid a dividend of $0.50 per share today and dividends are expected to increase at 5% per annum into the future. The bonds were issued 2 years ago, had an original life of 20 years and carry a 5% coupon that is paid semi-annually. The tax rate is 20%.

How much long-term capital does the firm have?

What is the firms cost of equity?

Suppose the firm incurs an issuing (or floatation) cost equal to 15% of price when they issue new stock. What is the firms cost of equity under these conditions?

What is the firms after-tax cost of debt?

What is the firms capital structure (in book value terms)?

What is the firms capital structure (in market value terms)?