Monk, Inc. manufacturers and sells household cleaners under various brand names. The data in the following table applies to Monk, Inc. (dollar amounts in millions):

Total assets	$54,520
Interest-bearing debt	$17,625
Average pre-tax borrowing cost	8.5%
Common equity:
Book value	$9,612
Market value	$45,680
Income tax rate	25%
Market equity beta	1.40

Assuming that riskless rate is 3.5% and the market premium is 6.2%, determine the following:

a. Monk's cost of equity capital.

b. The weight on debt capital that should be used to calculate Monk's weighted-average cost of capital.

c. The weight on equity capital that should be used to calculate Monk's weighted-average cost of capital.

d. Monk's weighted-average cost of capital.

e. Assume that Monk is a potential leveraged buyout candidate. Assume that the buyer intends to put in place a capital structure that has 60 percent debt with a pretax borrowing cost of 10 percent and 40 percent common equity. Compute the revised equity beta for Monk based on the new capital structure.