ABC's long-term debt consists of 6.90% coupon, semi-annual payment bonds with 15.00 years remaining to maturity.The bonds traded last week at a price of $1,000.00 per $1,000 par value bond.The bonds are not callable and are rated BBB.

2. Management has an aversion to short-term debt, so ABC uses such debt only to fund cyclical working capital needs.

3. ABC's federal-plus-state tax rate is 38.00%.

4. The firm's last dividend (Do) was $3.00, and dividends are expected to grow at about a 4.00% rate in the foreseeable future.ABC's common stock now sells at a price of $38.00 per share.

5. The current yield on long-term T-bonds is 4.00%, and a prominent investment banking firm has recently estimated that the market risk premium is 4.00% over Treasury bonds.The firm's historical beta, as measured by several analysts who follow the stock, is 1.10.

6. The required rate of return on an average (BBBA-rated) company's long-term debt is 7.70%.

7. The optimal capital structure for ABC calls for 46.00% long-term debt and 54% equity financing.

What is ABC's corporate cost of capital?Is the cost of capital the same as the cost of debt?Why or why not?