Question.4403 - Ch. 17 Written AssignmentDetailsResolve the following problems (1, 2, 4, 6 and 7 from the book chapter). Show the calculations.1 . SodaFizz has debt outstanding that has a market value of $3 million. The company’s stock has a book value of $2 million and a market value of $6 million. What are the weights in SodaFizz’s capital structure?2 . The yield to maturity on SodaFizz’s debt is 7.2%. If the company’s marginal tax rate is 21%, what is SodaFizz’s effective cost of debt?4 . SodaFizz has a beta of 1.1. If the risk-free rate is 3% and the market risk premium is 11%, what is the cost of equity capital for SodaFizz according to the capital asset pricing model?6 . Given the answers to Problems 1, 2, and 4, what is SodaFizz’s WACC when the CAPM is used to calculate SodaFizz’s equity cost of capital?7 . Shirley Manufacturing paid $1 million in interest payments last year. The company is in the 21% tax bracket and has $15 million in debt outstanding. How much was the company’s interest tax shield last year?
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