1) The balance sheet of Topaz Inc. is as follows

Assets: Liab. and Equity

Current Assets: 15 000 000 Account Payables 1 000 000

Long Term Assets: 120 000 000 Accrued Expenses 4 000 000

Short Term Loans: 20 000 000

Long Term Loans 60 000 000

Equity 50 000 000

Topaz do not have any outstanding preferred stocks. Its equity includes only the outstanding common stocks. Topaz pays an annual interest rate of 16% for short term loans and an annual interest rate of 18% for long term loans. The firm is subject to a 20% corporate tax rate. The firm wants to calculate an appropriate discount rate that will be used in evaluating the investments? Given this

a) Calculate the appropriate weights of debt end equity to be used in WACC

b) Calculate the cost of debt

c) Calculate the cost of equity assuming that the firm uses CAPM approach and the expected annual return of the index is 0.30, the beta of Topaz stock is 0.8 and the risk free rate (annual) is 5%

d) Calculate the appropriate discount rate (WACC)