Question 5 Fabian Fabrications have a target capital structure of 70% debt and 30% equity. The yield to maturity on the

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Question 5 Fabian Fabrications have a target capital structure
of 70% debt and 30% equity. The yield to maturity on the companies
bonds is 6%. The cost of equity for Fabian Fabrications is
currently 14%. Calculate the weighted average cost of capital for
Fabian Fabrications: (a) Under the assumption that there is no
taxation [3 marks] (b) When the corporate taxation rate is 25% [4
marks] (d) If the balance ot debt to equity changes to 50% debt and
50% equity and the corporate taxation rate remains 25% [3
marks]