Calculation of individual costs and WACC Carnival Corporation (CCL) recently sold new bonds at discount price of $924.69. The bonds have a short 3-year maturity, have a coupon rate of 10.50%, and pay interest semi-annually. In addition to the $10.003 billion worth of bonds outstanding, Carnival also has $11.262 billion worth of common stock equity outstanding. According to Yahoo! Finance, Carnival's stock has a beta of 1.73. Currently, the expected return on the market portfolio and risk-free rate are, 6.40% and 0.62%, 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.