METRA is considering building a new train line from Chicago to Wobegon. Use the following information to help Metra determine their cost of capital to assess the project:

• Debt totals $150 million with a 7.0% yield to maturity
• Common stock (14 million shares outstanding) now trade at $25 per share
• The common stock will pay an annual dividend of $1.15 next year, up from $0.94 four years ago.
• METRA pays a corporate tax rate of 25%.
• The risk-free rate is 3%, the market return is 9%
• Metra's common stock Beta is 1.2

1. What debt and equity weights will Metra use to calculate WACC?
2. What is METRA's cost of debt?
3. What is METRA's cost of common equity?
4. What is METRA's WACC?