(a) Calculate each of the following:

1.The firms cost of equity

2.The portion of the cost of equity attributable to the firms operating risk.

3.The portion of the cost of equity attributable to the firms financial risk.

(1) You are preparing a valuation for Acrobatics Corp. Based on the firm's most recent statement, the firm has debt of $1,000 and free cash flow of $2,250. The firm is stable and the constant, nominal growth rate is 7%. The firm's current stock price is $3 with 1,000 shares outstanding. Additionally, the firm has an equity beta of 1.2 and a cost of debt of 10%. Assume that the expected return on the market is 14%, the risk free rate is 5%, and the tax rate is 30%. Carry all percentages to 2 decimal places, for example, 70, 11.25% is not rounded to 11%