Q1: Phillips Equipment has 80,000 bonds outstanding that are selling at par (1000). The bonds outstanding have 20 years to maturity and pay an annual coupon payment of 9%. The company also has 750,000 shares of 7 percent preferred stock and 2.5 million shares of common stock outstanding. The preferred stock sells for $53 a share. The common stock has a beta of 1.34 and sells for $42 a share. The U.S. Treasury bill is yielding 2.8 percent and the return on the market is 11.2 percent. The corporate tax rate is 38 percent. What is the firm's weighted average cost of capital? Q2: R.S. Green has 250,000 shares of common stock outstanding at a market price of $28 a share. Next year's annual dividend is expected to be $1.55 a share. The dividend growth rate is 2 percent. The firm also has 7,500 bonds outstanding with a face value of $1,000 per bond. The yield to maturity that bonds of this category generally earn is 9.5%. The company's tax rate is 34 percent. What is the firm's weighted average cost of capital