Please show all work and calculations by hand. I am trying to learn the steps. Please don't use excel. Thank you.

(25) 3. (A) You have the following data for Hugo Incorporated: Number of shares of common stock outstanding Book value per share 60 million Market price per share $50.00 $40.00 Equity beta 2.50 Long-term debt outstanding Market yield of debt $700 million 5.00$ Coupon rate of debt 8.00% Assume perfect markets. The risk-free rate of interest is 3*, the expected return on the market portfolio is 108, and the standard deviation of return on the market portfolio is 208 What is the weighted Average cost of Capital (WACC) of Hugo? Number of stores are common shke markel prrce per shume :cquiry eguidy 60 mill. ** Y2400 million Debt: 700 million. 6 E 700 (10) 700 2700 (05)) 7602W 2900 1.05). 3'10 0.01128032267 0.0 779/93548 to 0.0887696774 Notar DIE DIE 240 760 3100 () 5 (B) Paige & Company is currently financed with all equity. and its cost of equity capital is 184. Paige is considering 199uing bonds (i.e., debt) with a coupon rate of 6t. Paige will use the money raised through the debt issue to repurchase some of the outstanding shares of common stock. Assume perfect markets. If Paige issues bonds to the point where its debt-equity ratio is .60, the bonds will have a market yield of 48. What will be Paige's new cost of equity capital? 6