1. Calculate the weighted average cost of capital for a company given the following information: Risk-free rate in the US: 4% Expected return on the U.S. market portfolio: 14% Company's risk relative to the market risk: 0.9 The company has 2-year, 12% bonds (paid semi-annually), face value of $1,000, selling for $1095.73. The company's marginal tax rate: 35% The company finances 38% of its capital by debt and 62% by common equity