Grohe is a leading manufacturer of high quality faucets and it sells its products worldwide. you are provided the following information

The long-term treasury bond rate is 6%.

The risk free rate on 3 months treasury bills is 3%

The market return is 7.5%

There are 10 million shares outstanding, trading at $ 45 per share currently; the stock has been traded for only two years. A regression of stock returns against market returns yields a beta of 0.7, with a standard error of 0.9

The debt on the balance sheet has two components. The first is traded bonds, with seven years to expiration and a coupon rate of 10%; there are 50,000 bonds outstanding, trading at $ 805 apiece (the face value is $ 1000). The second is $50 million in bank debt, which also has a ten year maturity, and carries an interest rate of 7%. With a market value of $35.9 million

the marginal tax rate is 35%

a. Estimate the cost of equity for GROHE Inc.

b. Estimate the market value of debt and the after-tax cost of debt for GROHE Inc.

c. Estimate the cost of capital for this firm using market value weights

hint: you can use the approximate formula for estimate the cost of debt.