Johnson Industries has the following balance sheet entries: Current assets 1.0 million Fixed assets 3.5 million Debt (value on balance sheet) 2.0 million The firm has no preferred stock, only equity.

Draw out a sample balance sheet:

Assume that the company has an outstanding bond issue with 10 years remaining to maturity. The bonds have a 9% coupon, and are trading at $930.00. Interest is paid semi-annually. What is the cost of debt capital for the firm?

* The company's common stock currently sells for $30 a share. * The company's most recent dividend was $3.00 a share. Dividends are expected to grow at a constant rate of 6 percent per year. Calculate the cost of equity capital

Assume that the company's tax rate is 30 percent. What is the company's weighted average cost of capital (WACC)?