Question 5: Zanda Company financing sources are 60% from common stock and 40% from debt. Use the data in the following table to calculate each of (3 Marks)

a) The cost of debt R_d. (1 mark)

b) The cost of common stock R_susing the Capital Asset Pricing Model CAPM. (1 mark)

c) The weighted average cost of capital WACC. (1 mark)

Symbol	Description	Rate / Value
Rd b t	Return on debt before tax	8%
B	Beta	1.2
Rrf	Risk free rate	3.5
Rm	Market return	12%
T	Tax rate	35%