ABC Motors has $25$ million shares outstanding trading at

$$18$ per share. ABC also has $$150$ million in outstanding

debt. $\backslash$beta e$,$ABC is $2.$ The expected market return is $7\%,$ and

rf is $1\%.$ ABC$$s $25-$year bonds have a coupon rate of $5\%$

and face value of $$1000,$ and now trade at $$766\mathrm{.}93.$ What

is its unlevered cost of capital?

XYZ Motors does the same business as ABC, but its debt

value is twice of its equity. If XYZ and ABC have the

same costs of debt, what is Re$,$XYZ$?$