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4.) Avicorp has a $ 10.7 million debt issue outstanding, with a 5.9 % coupon rate. The debt has semi-annual coupons, the next coupon is due in six months, and the debt matures in five years. It is currently priced at 93 % of par value. a. What is Avicorp's pre-tax cost of debt? Note: Compute the effective annual return. b. If Avicorp faces a 40% tax rate, what is its after-tax cost of debt? Note: Assume that the firm will always be able to utilize its full interest tax shield.

9.) AllCity, Inc., is financed 40% with debt, 9%with preferred stock, and 51% with common stock. Its cost of debt is 5.6%, its preferred stock pays an annual dividend of $ 2.46 and is priced at $27. It has an equity beta of 1.2. Assume the risk-free rate is 1.9%, the market risk premium is 7.3% and AllCity's tax rate is 35%. What is its after-tax WACC? Note: Assume that the firm will always be able to utilize its full interest tax shield.

10.) Pfd Company has debt with a yield to maturity of 7.3%, a cost of equity of 12.8%, and a cost of preferred stock of 9.5%. The market values of its debt, preferred stock, and equity are $12.3 million, $2.7 million, and $15.4million, respectively, and its tax rate is 40%.What is this firm's after-tax WACC? Note: Assume that the firm will always be able to utilize its full interest tax shield.

11.) Growth Company's current share price is $20.10 and it is expected to pay a $1.15 dividend per share next year. After that, the firm's dividends are expected to grow at a rate of 4.3% per year. a. What is an estimate of Growth Company's cost of equity? b. Growth Company also has preferred stock outstanding that pays a $2.10 per share fixed dividend. If this stock is currently priced at $28.00, what is Growth Company's cost of preferred stock? . c.Growth Company has existing debt issued three years ago with a coupon rate of 6.3%. The firm just issued new debt at par with a coupon rate of 6.5%. What is Growth Company's cost of debt? d.Growth Company has 5.4 million common shares outstanding and 1.2 million preferred shares outstanding, and its equity has a total book value of $50.0 million. Its liabilities have a market value of $20.1 million. If Growth Company's common and preferred shares are priced as in parts (a) and (b), what is the market value of Growth Company's assets? e.Growth Company faces a 35% tax rate. Given the information in parts (a) through (d), and your answers to those problems, what is Growth Company's WACC? Note: Assume that the firm will always be able to utilize its full interest tax shield.

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