INTEREST RATES: JANUARY 2018 \begin{tabular}{l|l} \hline GOVERNMENT BONDS & \\ 1-YEAR & 3.5% \\ CORPORATE BOND & \\ INFORMATION & \\ PAR VALUE & $1,000 \\ MARKET VALUE & $986 \\ COUPON RATE & 5.0% \\ AVERAGE LIFE & 12 years \end{tabular} Market Risk Premium Historical Average 6.0% LONGWOOD FINANCIAL DATA BALANCE SHEET (IN Other Information MILLIONS) LONG-TERM DEBT Beta 1.10 COMMON EQUITY RETAINED EARNINGS PER-SHARE DATA SHARES OUTSTANDING 500 million \begin{tabular}{l|l} BOOK VALUE PER SHARE & $5.00 \\ RECENT SHARE PRICE & $24 \end{tabular} 3. Using the information provided in Exhibit A, compute the cost of common equity, and debt. Assume Longwood has no preferred stock. Should the company continue to use it's historic hurdle rate, yes or no? Support your