1. ATMInc. has a debt-equity ratio of 1.5. The firm's weighted average cost of capital is 15 percent, and its pretax cost of debt is 6 percent. John is subject to a corporate tax rate of 30 percent.

1.1 What is ATM's cost of equity?Hint: use the weighted average cost of capital equation(3 points)

1.2 What is ATM's unleveraged cost of equity capital?Hint: use M&M II with corporate taxes (3 points)