Calculation of individual costs and WACC$$ Carnival Corporation$($CCL$)$ recently sold new bonds at discount price of $ $930\mathrm{.}53.$ The bonds have a short $8-$year $$maturity$,$ have a coupon rate of $8\mathrm{.}00\%,$ and pay interest$$ semi$-$annually. In addition to the $$$$10\mathrm{.}818$ billion worth of bonds$$ outstanding, Carnival also has $$$$12\mathrm{.}295$ billion worth of common stock equity outstanding. According to$$ Yahoo! Finance,$$ Carnival's stock has a beta of $1\mathrm{.}86.$Currently$,$ the expected return on the market portfolio and$$ risk$-$free rate$$ are, $6\mathrm{.}80\%$ and $0\mathrm{.}59\%,$ respectively.

a$.$Calculate the market value weights for$$ Carnival's capital structure.

b$.$Calculate$$ Carnival's cost of equity using the CAPM.

c$.$Calculate$$ Carnival's before$-$tax cost of debt.

d$.$Calculate$$ Carnival's current WACC using a $21\%$ corporate tax rate.

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Part $1$

a$.$ The market value weight of$$ long$-$term debt in$$ Carnival's capital structure is

$$

$46\mathrm{.}80\%.($Round to two decimal$$ places.$)$

Part $2$

The market value weight of common stock equity in$$ Carnival's capital structure is

$$

$53\mathrm{.}19\%.($Round to two decimal$$ places.$)$

Part $3$

b$.$Carnival$\text{'}$s cost of equity using the CAPM is

$$

$12\mathrm{.}14\%.($Round to two decimal$$ places.$)$