The company has 221000 shares outstanding with the book value of $4 . The shares are listed in stock exchange and currently tr ade at the level of p/B=3.0 . The risk free interest rate is currently 2% and the market risk premium is estimated to be 6%. The company has higher than average systematic risk, which is reflected in the value of beta, which is 1.50.

Moreover, the company has just issued 2568 discount bonds which mature in exactly 6 years. The face value of these bonds is 1000euro but current market price is $778.82. The corporate tax rate is 34%

Find

Market value of equity and cost of equity

Market value of debt and after-tax cost of debt. (if you were unable to find the cost of debt use 3%)

Estimate cost of capital.

should the company invest into the new investment project which has IRR= 9%