(Answered) What is the cost of debt

Finance

Problem: LTC Co. has a capital structure of 35% debt and 65% equity. Tax rate 40%. Risk free rate is 2%. RPm 5% Beta .3. Debt consists of a $3 million loan at stated rate of 6% and $2 million bonds at cost to maturity of 5%. Explain your answers and provides examples.

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Question 1: What is the cost of debt?

Question 2: What is the cost of equity?

Question 3: What is their WACC?

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