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Business finance questions

Bonds: The company issued 240,000 bonds. ; The bonds have a $1,000 face value with 7.5% coupons with annual payments, 20 years to maturity, and currently sell for $940. ; The marginal tax rate is 40%.

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Equity: The company has 9,000,000 shares of (common) stock outstanding, selling for $71 per share. ; The company’s beta is 1.2, the risk free rate is 1%, and the market risk premium is 10%.

1. What is the total market value of this firm?

2. ; What percent of the company’s financing is debt?

3. ; What percent of the company’s financing is equity?

4a. ; What is the after-tax cost of debt?

4b. ; What is the cost of equity?

5. ; What is the company’s weighted average cost of capital?

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