Table 1 Simplified Balance Sheets ($thousands)
	Firm 1	Firm 2	Firm 3
Interest-bearing Liabilities
Long-Term Debt & Capital Leases	36,825	52,917	1,973
Current Portion of Long-Term Debt & Capital Leases	4,405	4,116	203
Short-term Borrowings	5,257	5,711	98
Equity
Common Stock and Paid-in Capital	2,943	54,497	6,445
Retained earnings	85,107	38,315	3,261

Table 2 Simplified Income Statement ($thousands)
	Firm 1	Firm 2	Firm 3
Revenue	514,405	500,343	276,828
Costs and Expenses:
Cost of Goods Sold	385,301	373,396	145,062
Operating, Selling, General, and Administrative Expenses	107,147	106,510	91,936
Total Costs and Expenses	492,448	479,906	236,998
Operating Income	21,957	20,437	39,830
Interest Expense, Net	-2,129	-2,178	-6
Other Items	-8,368	-3,136	-11
Income Before Income Taxes	11,460	15,123	39,813
Income Tax Expense	3,281	4,400	12,472
Net Income	8,179	10,723	27,341

1. Using the data from Table 1 in the Data spreadsheet, estimate the weights of debt and equity in each firms capital structure

2. Using the data from Table 2 in the Data spreadsheet, estimate the effective corporate tax rate for each firm and use it to estimate the after-tax weighted average cost of capital for each firm