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To help finance a major expansion, Castro Chemical Company sold a noncallable bond several years...

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To help finance a major expansion, Castro Chemical Company sold a noncallable bond several years ago that now has 11 years to maturity. This bond has a 7.50% annual coupon, paid semiannually, sells at a price of $1059, and has a par value of $1,000. If the firm's tax rate is 35%, what is the component cost of debt for use in the WACC calculation (i.e. after-tax cost of debt)? S. Bouchard and Company hired you as a consultant to help estimate its cost of capital. You have obtained the following data: DO = $2.93; PO = $41.00; and g=5.00% (constant). The CEO thinks, however, that the stock price is temporarily depressed, and that it will soon rise to $49.00. Based on the DCF approach, by how much would the cost of equity from retained earnings change if the stock price changes as the CEO expects? Do not round your intermediate calculations

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