The current market rate of return $($Rm$)$ is $15\%$ and the risk$-$free rate $($rf$)$ is $5\%.$ The $\backslash$beta of the equity is $1\mathrm{.}3$ and the tax rate is $40\%.$

You have been given the job of determining your firm's cost of capital components. The company has $10$ million shares outstanding with a current market value of $$2\mathrm{.}50$ per share. The debt represents $30\%$ of the capital structure and the yield to maturity $($YTM$)$ is $12\%.$

Q$1.$ How does one calculate a company$$s WACC?

Q$2.$ When calculating a firm$$s WACC, why are market value weights more appropriate than book value weights?

Q$2.$ What can a corporation do to lower its cost of capital?

Q$3.$ What is the market value of the firm?

Q$4.$ What is the market value of debt?

Q$5.$ What is the firm's WACC?