How do I calculate COST OF CAPITAL (NOT WACC - Just COST OF CAPITAL)? Please show how to calculate not just the number.

Assignment: Determine

The after-tax cost of equity funding?

The after-tax cost of long-term debt funding?

The book value weights?

The marginal or market value weights?

The after-tax weighted average cost of capital (WACC) at book value?

The after-tax weighted average cost of capital (WACC) at market value?

Marginal Tax Bracket: 21%

Equity Information:

50 million shares

Issued with $40 Par value

Sold at $40 per share, no excess

Market Price: $80 per share

D0 = $5.15

Growth Rate = 5.0%

Flotation Cost = 9.0%

Retained Earnings = $1 billion

Debt Information:

$1 billion in outstanding debt

$1,000 face value per bond

Current quote = 110

Coupon rate = 9%, semiannual coupons

15 years to maturity

Flotation Cost = 2%