A$)$ Assume you would like to estimate the cost of debt for XYZ Company. XYZ$$s bond has a semi$-$annual $5\mathrm{.}25\%$ coupon rate and a par value of $$1,000,$ with a market price of $86$ percent of the par. Assume a number of years to maturity is $20,$ then estimate the cost of debt for XYZ$.$

B$)$ Assume the beta of XYZ is $1\mathrm{.}20,$ and the capital structure of XYZ is $70\%$ equity financing and $30\%$ debt financing, and the tax rate is $21\%.$ Estimate the cost of capital for XYZ Company.

Hint: Use Excel to estimate the cost of debt.

$-$Then estimate the after$-$tax cost of debt.

$-$Then use the CAPM to estimate the cost of equity.

$-$Once you have all of the above estimations, use the Cost of Capital formula to estimate its cost of capital.