Pearson's Firm common stock is currently selling on the market for $85 per share. There are 100000 shares outstanding. The firm has just paid a dividend of $2. Analysts project that Pearson's firm will grow at a rate of 4% per year. The firm also has an outstanding debt with a total combined face value of $45000000, which is selling today for 90% of its face value, has an annual coupon interest rate of 5%, and a time to maturity of 15 years. The tax rate is equal to 25%.

Required:

1) Find the required rate of return for Pearson Firms equity.

2) Find Pearson Firms cost of debt before taxes.

3) Find the proportion of equity financing.

4) Find the after-tax cost of debt.

5) Find the proportion of debt financing.

6) Find the firms WACC.