The following is extracted from the latest balance sheet of Kumar Corporation:

2,000,000 ordinary shares of common stock currently selling at $50 per share. Such shares has a beta of 1.2

40,000 bonds outstanding with a 8% annual coupon rate, 10 years to maturity, a $1,000 face value. The bonds have a $1,050 market price.

400,000 shares of preferred stock pay a $2 annual dividend. The shares sell for $25 per share.

The current risk-free rate is 5% and the market return is 15%.

Tax rate is 40%

(a) What is the market value of the bonds? (2 mark)

(b) What is the return required by bond holders? (2 mark)

(c) What is the market value of the preference shares? (2 mark)

(d) What is the return required by preferred shareholders? (2 mark)

(e) What is the market value of the common stock? (2 mark)

(f) What is the return required by common stock holders? (2 mark)

(g) What is the WACC of Kumar Corporation? (8 Marks)