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Calculate Gamma Corporation's cost of debt

Calculate Gamma Corporation's cost of equity 

Calculate Gamma Corporation's WACC

GIVEN ABOUT THE MARKET: T-bill return is 3.1% annually. The expected annual return on the market portfolio equals 12 %. GIVEN ABOUT THE "GAMMA CORPORATION": Gamma Corporation's capital structure is levered. (If Gamma Corporation was not levered, its equity Beta would have been .95.) Gamma Corporation would like to maintain a target debt-to-equity ratio of .50 which is its current level. Gamma Corporation has debt in the form of corporate bonds. The bonds mature in 25 years, each bond has a $1,000 par value, and the coupon rate of 6 %. The bonds require that the coupons are made semiannually until the bonds mature. Each bond can be traded for $1,050 in today's economy. Gamma Corporation faces a 23 % tax rate on its taxable income.