Debt Information:

oOutstanding debt in the form of bonds with a face value = $1 bn.

oCurrent quote = 110

oCoupon rate = 9%, Semiannual coupons, 15 years to maturity

Equity Information:

o50 million shares, $80 per share

oBeta = 1.15

oMarket risk premium= 9%

oRisk-free rate = 5%

oThe firm's tax rate is 40%

What is the cost of debt?

with steps please use formulas

What is the cost of equity?

with steps please use

What are the capital structure weights?

Compute the Weighted AverageCost of Capital