Question 2

McDonalds has a bonds average yield of 7 percent and a stock beta of 0.9. Currently, US treasury bill rates is 3 percent and world market index is 9 percent. McDonalds has total assets of $100 million and debt of $60 million, and falls within 30 percent tax bracket.

What is its cost of equity?

What is its weighted average cost of capital?

Round your answer to 4 decimal points. Do not put your answer in percentage.