AQNP Corp has 80 million shares outstanding trading for $65 per share. In addition, AQNP has $1,250 million in outstanding debt. The risk free rate of return is 4%, expected market return in 9% and AQNPs beta is 1.75. AQNPs debt cost of capital is 6.5%, and the corporate tax rate is 40%. [5 marks]

a. What is AQNPs unlevered cost of capital? (2 marks)

b. What is AQNPs after-tax debt cost of capital? (0.5 marks)

c. What is AQNPs weighted average cost of capital? (2 marks)

d. What is the difference between unlevered and weighted average cost of capital (WACC)? (0.5 marks)