At December 31,2017, Day-Brite Inc's market value of equity was $8 billion and its total market value was $12 billion. Day-Brite's assumed statutory tax rate was 32%, its pretax borrowing rate was 4%, and its estimated market beta was.78. Assume also that the expected risk-free rate is 2.5% and the expected market risk premium is 5%. Estimate Day-Brite's cost of debt capital 4.0% 1.3% 0.9% 2.7%