Below you are given information on Efaw, Inc.s capital structure as well as information on Efaws stock and bonds. Compute Efaws cost of capital.

Capital Structure
Book Value of Debt	$2,000,000,000
Market Value of Debt	$2,500,000,000
Book Value of Equity	$3,500,000,000
Market Value of Equity	$4,000,000,000
Stock Info
Beta	1.32
Risk Free Rate	1.25%
Market Risk Premium	7.50%
Cost of Issuing Equity	5%

Bond Info
Coupon Rate	6%
Years of Maturity	22
Par Value	$1,000
Price of Bond	$963.75
Cost of Issuing Debt	2.50%