HBM, Inc. has the following capital structure: Assets $500,000 Debt $140,000 Common Stock $360,000 The common stock of the company has a of 1.1 and the expected market risk premium is 7%. The rate on long-term Treasury bonds is 3.5%. The debt pays an interest of 9% annually and the firm is paying 20% effective tax rate.

(a) What is the after-tax cost of debt?

(b) What is the cost of common stock?

(c) What is the firms weighted-average cost of capital?