The Fresno Eastern Company (FEC) bond carries a coupon rate of 6% with semi-annual payments, a $1,000 par, and a maturity of 20 years. The current price of the bonds is $990. The firms average tax rate is 21%. What is its after-tax cost of bonds (debts)? Round the answers to 4 decimal places, e.g., 0.3216.

Treasury bond currently yields 1.80% and the expected market return is 8%. FECs beta is 0.98. Please use the CAPM model to calculate FECs cost of common stock?

FEC capital structure is as follows: Bonds (2,000 bonds outstanding) $1,960,000 Common stock (600,000 shares) $6,000,000 Based on your calculation on its cost of debts and common stocks, what is FECs WACC (weighted average cost of capital)?