Horizon Landscaping Inc. has 80,000 bonds outstanding that are selling at par value (assume $1,000 for par). Bonds with similar characteristics are yielding 8.6 percent (i.e., yield to maturity). The company also has 4 million shares of common stock outstanding. The stock has a beta of 1.1 and sells for $40 a share. The U.S. Treasury bill is yielding 4 percent and the market risk premium is 8 percent. The company's tax rate is 34 percent.

a) Calculate the cost of equity.

b) Calculate the capital structure weights for Debt and Equity. Leave four decimal places throughout your calculations.

c) Calculate the weighted average cost of capital. Leave four decimal places throughout your calculations.

Clearly label your findings (e.g., enterprise value = ..) and designate which part of the question you are answering such a, b, c (if there are multiple parts). Show your work by typing it in Canvas. Answers (whether correct or incorrect) without work shown will receive zero points. Simply typing your work will suffice. (e.g., x = y + 2z). No need to use mathematical functions in Canvas.