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Estimating Cost of Capital Measures Sprint Nextel Corporation (S) has $25.6 billion in total debt (which approximates its market value.) Each year this debt costs the company about $1.5 billion in interest expense. The company's market capitalization approximates $17.2 billion, its market beta is estimated 2.12, and its marginal tax rate is 35%. Assume that the risk-free rate equals 5.4% and the market premium equals 5.8%. Rounding Instructions: Do not round until your final answers. Round answers to one decimal place.

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(a) Estimate Sprint Nextel's cost of debt capital. Answer

%

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(c) Estimate Sprint Nextel's cost of equity capital. Answer

%

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(d) Using your rounded answers from (a) and (c) above, estimate Sprint Nextel's weighted average cost of capital. Answer

%

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