Can you please explain Step by Step how to get to the final answer, and where each number comes from. Thank you.

Lester Inc. has 5 million shares outstanding, trading at $20/share. The company has one convertible bond, with a face value of $100 million, a ten-year maturity and a coupon rate of 2%; the bond has a market value of $120 million. If the current cost of equity for the firm is 10% and the pre-tax cost of debt is 5%, what is the cost of capital for the firm? (The marginal tax rate is 40%)