You are tasked with analyzing privately owned company that was founded 8 years ago. Last year it had 97 million dollars in sales, the cost of goods sold was 80 million dollars and depreciation was 2 million dollars. All of the companies growth has come from profit, and the company has expanded production when they have had enough capital to do so. Capital is made up of owners equity and a bank loan. The loan is for 15 years and amounts to 8 million dollars, the APR of the loan is 12.15% based on semi- annual compounding. The company pays $95,260 monthly for 8 years. The marginal tax rate is 35% and the required return on equity is 20%.

1. Based on the information above what is the outstanding debt value? Determine the book value of debt as the amount still owing on the bank loan.
2. Determine the value of the levered and un-levered firm.
3. Calculate the firms yearly cost of capital based on the book values, find the after tax WACC using the yearly cost of debt.