Helms Aircraft has a capital structure which consists of $70\%$ debt and $30\%$ common equity. The company's equity financing will come from retain earnings. The company's long term bonds trade at $$950$ with a $7\%$ Coupon Rate with semi$-$annual coupon payments and $20$ years to maturity. The company's common stock is currently trading at $$40$ per share and expects a dividend of $$4$ per share $(D_1)$ over the next year. Earnings and dividends are expected to grow at $5\%$ annually. The risk free rate is $4\%$ the market return is $10\%$ and the company's beta is $1\mathrm{.}0.$ The yield on the Corporate A bond is $6\%$ and the company's tax rate is $25\%($using cost of retained earnings and assuming no preferred stock$).$

a$.$ What is the cost of debt?

b$.$ What is the cost of retained eamings using the CAPM model? The DCF model? The Bond yield plus risk premium? What is the average cost of retained earnings?