Solve with excel

5. The following facts apply to the DEF Company: Cost of short-term loans 0.05 Cost of long-term loans 0.06 Cost of common stock capital 0.10 Item Current liabilities (non-interest- $10,000,000 bearing) Short-term loans (interest 5,000,000 bearing) Accumulated depreciation 50,000,000 Long-term debt Common stock Book value Market value $10,000,000 5,000,000 Not applicable 20,000,000 75,000,000 20,000,000 25,000,000 a. Compute the average cost of capital. Assume the corporate income tax rate is 0.4. b. Assume that as a result of a decrease in the income tax rate to 0.3, the market value of the common stock rises to $100 million with no change in the cost of common stock capital. Compute the new average cost of capital for the DEF Company