ABC Company has a target Debt Ratio of 60%. ABC has a debt issue outstanding that is currently trading at 105% of its pa

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ABC Company has a target Debt Ratio of 60%. ABC has a debt issue
outstanding that is currently trading at 105% of its par value of
$1,000. The outstanding issue pays annual interest payments, has a
coupon rate of 8.20%, and 7 years remaining until maturity;
new debt with a 30-year original maturity will incur an 5%
flotation cost. Further, ABC's common stock trades currently at a
price of $36.45 and the market expects ABC to pay a dividend
in one year of $3.8 (ABC just paid a dividend of $3.42, and
this growth rate is expected to continue); ABC pays out all net
income as dividends; and new equity will incur a 12% flotation
cost. ABC’s tax rate is 32%.
a. What is the YTM on ABC’s existing debt?
b. What is ABC's before tax cost of debt?
c. What is ABC's after-tax cost of debt?
d. What is ABC’s expected future growth rate?
e. What is ABC's cost of internal equity?
f. What is ABC’s cost of external equity?