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CALCULATE THE COST OF DEBT;Walmart has at least 50 long-term bonds, the weighted averageyield on these bonds is 3.2%. On the other hand, a simplified costof debt can be calculated as the interest expenses divided by twoyear average of book value of debt. For Walmart, the book andmarket value of debt is nearly identical. This estimated cost ofdebt is 4.49%.For our purposes, we will take the average, and use 3.85% as thepre-tax cost of debt (preliminary).Now that we have the average pre-tax cost of debt, we need toaccount for the underwriter spread. We are simplifying fromflotation costs calculated for equity. The adjusted pre-tax cost ofdebt should be estimated rate (from above)/(1-UW spread). Estimatedpre-tax cost after accounting for underwriter spread and otherflotation costs (the total of 1.5%). We calculate this adjustedpre-tax cost of debt as: original pre-tax estimate/(1-flotationcost %)1) What is the adjusted pre-tax cost of debt (rd)? [showyour work below]WEIGHTED AVERAGE COST OF CAPITAL1) What is the Weighted average cost of capital? Be sureto show your inputs in your WACC above and be sure to adjust fortaxes as appropriate.2) Discuss: Is this weighted average cost of capital a“good” hurdle rate to use for all new Walmartprojects?