1.What is the pretax cost of debt for a firm in the 35% tax bracket that has a 9% after-tax costof debt?2. The beta values for a market index (for example S&P 500) is:3. A firm has issued $20 million in long-term bonds that now have 10 years remaining untilmaturity. The bonds carry an 8% annual coupon but are selling in the market for $877.10.For cost of capital purposes what is the after-tax cost of debt with a corporate tax rate of35%?4. Which of the following is NOT a capital component when calculating the weighted average costof capital (WACC)?A) Long-term debt.B) Accounts payable.C) Retained earnings.D) Common stock.E) Preferred stock
