Assume firm calculates cost of equity with CAPM and cost of debt with government bond yield plus Debt Rate Premium above Government.

$$ Spread between S&P $500$ Composite Returns and Long$-$Term U$.$S$.$ Government Bond Returns is $9\%.$

$$ U$.$S$.$ Government Interest Rates on $30-$year bond is $3\%.$

$$ UNR inc.$$s Debt Rate Premium above Government is $7\%.$

$$ UNR$$s equity beta is $2\mathrm{.}5$

$$ Tax rate is $20\%.$

$$ Target capital structure has $30\%$ debt and $70\%$ equity.

Data from UNR inc.$$ Balance Sheet $2020$

Capitalization and Returns $($in millions$)$

Total assets $$35,000$

Long$-$term debt $$24,000$

Shareholders$$ equity $$10,000$

Per Share and Other Data

Market price $($year$-$end$)$ $$40$

Shares outstanding $($millions$)1000$

a$)$ Using the given information calculate WACC of the UNR inc. under actual capital structure.

b$)$ Using the given information calculate WACC of the UNR inc. under target capital structure.