To hlip finance a major expansion, Castro Chemical Company sold a noncallable bond -several years that now has 20 years to maturity. This bond has a 9.25% annual coupon, id semiannually, sells at a price of $828.36 and has a maturity value of $1,000. If the firms ur rate is 40%, what is the component cost ofdebt for use in the WACC calculation? 4.35% b. 4.58% c, 4.80% d. 5.08% e. 5.33% You have obtained the following data: (1) ra-yield on the firm's bonds-7.00% and the risk premium over its own debt cost. 4.00% (2) no (default nsk free rate) 5.00%, RPM ( ma 31. The CFO of Lenox Industries hired you as a consultant to help estimate its cost of capital. -.-6.00%, and b (beta)-1.25. (3) Di-$ 1.20, Po-S35.00, and g-8.00% used methods and then to indicate the difference between the highest and lowest of these estimates. What is that difference? You were asked to estimate the cost of equity based on the three most commonly 1 1.13% b, 1.50% c. 1.88% d. 234% e. 2.58% 32 You were hired as aconsultant to Gambino Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of ref any new stock and the cost ofAta ed cam ngs is 12.75% The firm will not be 8.98% b. 9.26% a. c.954% d. 9.83% e. 10.12% 3. Which of the following bank accounts has the highest effective annual return? has a An account that pays 8% nominal interest with monthly compounding. b, An account that pays 8% nominal interest with annual compounding. c. An account that pays 7% nominal interest with daily (365-day) compounding. . An account that pays 7% nominal interest with monthly compounding. An account that pays 8% nominal interest with daily (365-day) compounding