a. A bond has a face value of $1,000. It has a maturity of 20 years and a coupon rate of 9%. The bond pays interest semiannually. The yield on the bond is 10%. Assuming a 30% tax rate, what is the after tax cost of this bond, for purposes of calculating the company's WACC?
b. How much is your monthly payment on a home mortgage with the following terms? Borrow $250,000 for 30 years at 5% annual interest.