Cost of Capital Epsilon Company's last annual dividend was $4 per share, and both earnings and dividends are expected to grow at a constant rate of 7%. The stock now sells for $50 per share. The company's beta coefficient is 1.5. The return of a market portfolio is 12%, and the risk-free rate is 8%. The company's A-rated bonds are yielding 9%. Epsilon Company's has Debt to Equity ratio 140%. d. Calculate cost of debt if corporate tax is 25%? e. Calculate the cost of equity using (a) the capital asset pricing model and the dividend discount model? f. What is the weighted average cost of capital?