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any help is appreciated Cabana Cruise Line uses a combination of debt and equity to fund operations, and they have a bond r and currently

any help is appreciated
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Cabana Cruise Line uses a combination of debt and equity to fund operations, and they have a bond r and currently trades at a value of $51 per share. Cabana Cruise Line has outstanding debt of $150mi information is provided in the tables below. \begin{tabular}{|lr|l|l|r|} \multicolumn{1}{|c|}{ Cost of Equity } & & \multicolumn{2}{|c|}{ Cost of Debt } \\ \cline { 1 - 2 } \cline { 5 } Risk Free Return Rate & 4% & & Probability of Default & 2% \\ \hline Market Return & 8% & & Debt yield to maturity & 5% \\ \hline Company Return & 10% & & Loss Rate & 40% \\ \hline Beta & 1.05 & & Beta & 0.95 \\ \hline \end{tabular} Using the data provided, 1. Apply CAPM to determine the cost of equity and the cost of debt for Cabana Cruise Line. 2. Apply WACC to determine the hurdle rate that should be used by Cabana Cruise Line. Cost of Equity Required return of security i= risk free rate + Beta x (value of equity [return of market] . ri=rf+Bi(E[Rmkt]rf Cost of Equity = Cost of Debt rd = yield to maturity - probability of default x expected loss rate Cost of Debt= WACC Rate WACC =[ Equity / (Equity + Debt )] x rate of equity +[ Debt / (Equity + Debt )] Rate of det RWACC=[E/(E+D)]RE+[D/(E+D)]RD(IRTax) WACC =

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