Epson has one bond outstanding with a yield to maturity of 7% and a coupon rate of 8%. The company has no preferred stock. Epson's beta is 1.4, the risk-free rate is 2.2% and the expected market risk premium is 6%.

Epson has a target debt/equity ratio of 0.4 and a marginal tax rate of 34%.

part 1: What is Epson's (pre-tax) cost of debt?

part 2: What is Epson's cost of equity?

part 3: What is Epson's capital structure weight for equity, i.e., the fraction of long-term capital provided by equity?

part 4: What is Epson's weighted average cost of capital?