GWU Electronics has a beta of 1.5. The risk-free rate is 2% and the market risk premium is 8%. Assume that tax rate is 35%. The firm has a $400,000 face value bond issue outstanding with 15 years to maturity that is quoted at 90 percent of face value. The issue makes semiannual payments and has a coupon rate of 8 percent. It has 30,000 shares of common stock outstanding with a book value of $30 per share and a market value of $40. (27 pts) 2. Estimate the firm's cost of equity using CAPM. (5 pts) Estimate the firm's pre-tax cost of debt. (5 pts) Calculate the WACC for this company. (5 pts) Suppose that you decided to change your methodology for cost of equity. d. GWU's common stock trades at $40.00 per share and its expected dividend next year is $2.00. Dividen are expected to grow by 4%. If the tax rate 35% is constant, what is the new WACC? Use the cost debt in (b). (6 pts)