At current levels of capital and labor for a firm, the cost of capital is $15 per hour, the wage paid to employees is $30 per hour, the marginal product of capital is 30 units per hour, and the marginal product of labor is 40 units per hour. Should firm change up its ratio of capital labor?

The stock is currently selling for $17.75 per share, and its noncallable $3,319.97 par value, 20-year, 1.70% bonds with semiannual payments are selling for $881.00. the beta is 1.29, the yield on a 6-month treasury bill is 3.50%, and the yield on a 20-year treasury bond is 5.50%. the required return on the stock market is 11.50%, but the market has had an average annual return of 14.50% during the past 5 years. the firm's tax rate is 40%.refer to exhibit 10.1. what is the best estimate of the after-tax cost of debt? a. 6.07%