Bigtime Coffee is raising capital through debt and equity financing. The firms CFO has gathered the following data:

• The only debt securities the firm has outstanding are 65,000 of its original 15-year, 6% coupon bonds, which are paid semi-annually and have a par value of $1,000; currently, the bonds have 12 years until maturity and are selling at a price of $1,120
• The firm has 1.6 million preferred shares outstanding, currently priced at $32.75, and pay an annual (preferred) dividend of $1.65
• There are also 3.2 million shares of common stock outstanding, currently priced at $24.00/share

The companys beta is 0.9 and its effective tax rate is 25%. You were also informed by the CFO that the expected return on the market is 12% and the risk-free rate is 1.5%. Bigtime Coffee pays flotation costs of $1.25/share on all newly issued preferred equities; disregard any flotation costs associated with the debt and common equity issuance.

(a) What is Bigtime Coffees after-tax cost of debt?

(b) Calculate the firms cost of common equity.

(c) Compute Bigtime Coffee's after-tax weighted average cost of capital.