A. You are an investment analyst and are trying to calculate the cost of capital for company XYZ. You know that the company has a beta of 1.2 and that the risk-free rate is 2%. You also know that the expected return on the market is 8%. The company has 100000 shares on issues that are currently selling for $5 per share. In addition, the company has issued debt with a face value of $400000 that pays 10% coupons annually and has 10 years to maturity. The yield to maturity is 5%. Calculate the weighted average cost of capital. The tax rate is 25%. (15 Marks)