Epson has one bond outstanding with a yield to maturity of 4% and a coupon rate of 8%. The company has no preferred stock. Epson's beta is 0.9, the risk-free rate is 1.8% and the expected market risk premium is 6%.

Epson has a target debt/equity ratio of 0.3 and a marginal tax rate of 34%.

IB Attempt 1/10 for 10 pts. Part 1 What is Epson's (pre-tax) cost of debt? 4+ decimals Submit 18 Attempt 1/10 for 10 pts. Part 2 What is Epson's cost of equity? 3+ decimals Submit Part 3 18 Attempt 1/10 for 10 pts. What is Epson's capital structure weight for equity, i.e., the fraction of long-term capital provided by equity? 2+ decimals Submit 18 Attempt 1/10 for 10 pts. Part 4 What is Epson's weighted average cost of capital? 3+ decimals