Key facts and assumptions concerning Costco Company, at December 31, 2011, appear below: Yield to maturity on long-term government bonds: 3.28% Yield to maturity on company long-term bonds: 4.62% Coupon rate on company long-term bonds: 5.50% Market price of risk, or risk premium: 6.10% Estimated company equity beta: 0.80 Stock price per share: $75.08 Number of shares outstanding: 449.5 million Book value of equity: $11,585 million Book value of interest-bearing debt: $2,524 million Tax rate: 35% Use the above information to answer the following questions. 1. Estimate Costco's cost of equity capital. 2. Estimate Costco's weighted-average cost of capital.