6. Teall Development Company hired you as a consultant to help them estimate its cost of capital. Assume the company's tax rate is 40 percent. You collect the following information: Debt: 8000, 7 percent coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 106 percent of par, the bonds make semiannual payments. Common stock: 500,000 shares outstanding, selling for $55 per share; the beta is 1.2. Preferred stock: 20,000 shares of 5 percent preferred stock outstanding (par value of $100), currently selling for $65 per share. Market: 7 percent market risk premium and 5 percent risk-free rate. a. What is the weight of debt as it relates to the firm's weighted average cost of capital? (4 marks) b. What is the firm's weighted average cost of capital? (6 marks)