Suppose Goodyear Tire and Rubber Company has an equity cost of capital of $7\mathrm{.}8\%,$ a debt cost of capital of $6\mathrm{.}3\%,$ a marginal corporate tax rate of $23\%,$ and a$$ debt$-$equity ratio of $2\mathrm{.}9.$ Assume that Goodyear maintains a constant$$ debt$-$equity ratio.

a$.$ What is$$ Goodyear's WACC?

b$.$ What is$$ Goodyear's unlevered cost of$$ capital?$$

c$.$ Explain, intuitively, why$$ Goodyear's unlevered cost of capital is less than its equity cost of capital and higher than its WACC.