Hoak Company's common stock is currently selling for P₀ = $100. Last year's dividend was D₀ = $2.5 per share. The financial market expects its dividends to grow at an annual rate of 4%. The company has a debt-to-equity ratio of 1.5, and its debt investor expects a 5% return. The company faces a marginal tax rate of 20%.

1.According to the constant dividend growth model, what is the cost of equity (percentage) from the Hoaks point of view?

2.What is the after-tax cost of debt of the bond?

3.What is Hoaks weighted average cost of capital?