A firm has 2.25 million shares of common stock outstanding with a market price of $20 per share. It has 25,000 bonds outstanding, each selling for $1,100. The bonds mature in 12 years, have a coupon rate of 8.5%, and pay coupons annually. The firm expects its next year dividend to be $2.92 and expects it to grow at 3% in perpetuity. The stock price is currently $20. The firm's tax rate is 35%. You may assume the bonds have a $1,000 face value each.

a.Solve for the firm's market value capital structure (mix of debt and equity).

b.Solve for the firm's debt cost of capital.

c.Solve for the firm's equity cost of capital.

d.Solve for the firm's weighted average cost of capital.