Isatis Inc. uses 70% equity and 30% debt for all of its financing needs. Shares of the common stock sell at $48. The company expects to pay $1.35 in dividends next year and increase that amount by 3% annually. The bonds have a 7% coupon rate and a yield-to-maturity of 7.8%. The company has a 32% marginal tax rate. (Show all your work)

a) What is the cost of equity?

b) What is the cost of debt?

c) What is the WACC?