As an Investment Analyst at Rollways Securities, you are preparing for a next meeting of the investment committee. The committee requested that you assess the capital structure of Errod Production Limited, a manufacturer of commercial and industrial products. The following information is available about the company to assist you in completing your assessment. A. Cost of Equity - Suppose stock in Errod Production Limited has a beta of .80. The return on the market 12% percent, and the risk-free rate is 6 percent the firm's last dividend was $1.20 per share, and the dividend is expected to grow at 8 percent indefinitely. The stock currently sells for $45 per share. B. Determine the firm's cost of equity capital using the: i. SML approach Dividend growth model Total: 8 marks ii. B. Calculating the WACC In addition to the information given above, suppose Errod Production Limited has a target debt-equity ratio of 50 percent. Its cost of debt is 9 percent, before taxes. If the tax rate is 35 percent. Determine the company weighted average cost of capital (WACC)