South American Airlines' (SAA) shares are currently trading at $69.25 each. The yield on the company's debt is 4% and the firm's beta is 0.7. The T-Bill rate is 4% and the expected return on the market (E (kM)) is 9%. The company's target capital structure is 25% debt and 75% equity. The company pays a combined income tax rate of 35%. The GST rate is 13%.What is SAA's cost of equity? (3 marks)

1.Using the information outlined in #11, calculate SAA's cost of debt (after tax).(3 marks)

2.What is SAA's weighted average cost of capital? (3 marks)

WACC = Ce * We + Cd * Wd(after tax)

3.What does SAA's weighted average cost of capital mean? Describe it (explain) (3 marks)

Detailed calculations nedded