Use the following information for the next 2 questions:

Tulips Corp., a Dutch company, provided information on their capital sources as followed.

• 52,500 in Debt: Their bonds have 30-year to maturity, 4% coupon and 1,000 par value. Current bond price is 980. Tax rate is 15%.
• 1,125 shares of common stocks with current price of 140. Beta is 0.87. Dutch government 15-year bond rate is 2.5%; market return is 10.6%.

What is their after-tax cost of debt?

	1.56%
	3.50%
	5.19%
	4.12%

How much is their cost of capital?

	15.97%
	11.28%
	9.55%
	8.04%