Consider the following scenario (the given information is the same as in the previous question): suppose a company has 100 million common shares outstanding, and each share sells for $20. we have estimated that the shares have a beta of 1.25, the risk-free rate is 2%, and the expected market return is 6%. the marginal tax rate for this company is 35%. the company also has $1 billion of bonds outstanding and the yield to maturity on these bonds is 4%. the company has a target capital structure of 60% equity and 40% debt. it does not and will not issue preferred stocks in the future. what is the after-tax cost of debt for this company?

Exercise 6-2 variable costing income statement; explanation of difference in net operating income [lo6-2] ida sidha karya company is a family-owned company located on the island of bali in indonesia. the company produces a handcrafted balinese musical instrument called a gamelan that is similar to a xylophone. the gamelans are sold for $970. selected data for the company’s operations last year follow: units in beginning inventory 0 units produced 200 units sold 180 units in ending inventory 20 variable costs per unit: direct materials $ 130 direct labor $ 300 variable manufacturing overhead $ 30 variable selling and administrative $ 15 fixed costs: fixed manufacturing overhead $ 63,000 fixed selling and administrative $ 25,000 the absorption costing income statement prepared by the company’s accountant for last year appears below: sales $ 174,600 cost of goods sold 139,500 gross margin 35,100 selling and administrative expense 27,700 net operating income $ 7,400 required: 1. under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. prepare an income statement for last year using variable costing.