Strolling Corporation is constructing its Cost of Capital schedule. The firm is at its

target capital structure. Its $15$ year bonds have a $4\mathrm{.}5\%$ coupon rate and sell for

$$960.$ Bond coupons are semi$-$annual. Rolling's stock beta is $1\mathrm{.}3,$ the risk$-$free rate is

$3\mathrm{.}0\%,$ and the return on market portfolio is $7\mathrm{.}0\%.$ Rolling is a constant growth firm,

and will pay a dividend of $$1\mathrm{.}50$ next year. The stock sells for $$35\mathrm{.}00$ and has a

growth rate of $5\mathrm{.}1\%.$ The firm's tax rate is $30\%.$ The firm's book value balance sheet

is as follows: Assets $$35,600,$ Long Term Debt $$36,000,$ Equity $($ $$1\mathrm{.}00$ par$)$ $$3,874,$

Retained Earnings $$4,274,$ Comprehensive Income $1,500.$ To the nearest $\mathrm{.}1\%,$ what

is the weight of debt that should be used in computing the Weighted Average Cost

of Capital?

A To the nearest$\mathrm{.}1\%,$ what is the pre$-$tax cost of

debt?

A$)$ To the nearest $.1\%,$ what is the cost of retained

earnings using the Constant Growth Model?

A To the

nearest. $1\%,$ what is the cost of equity using the Capital Asset Pricing

Model?

A$/$ Using your Constant Growth Model cost of equity,

to the nearest. $1\%,$ what is Strolling's Weighted Average Cost of

Capital?