The first parts of the question are:

1. How much long-term debt does it have? What is the average cost of that debt? Note: don't spend too much time looking for its cost of debt. If can't find it after a quick search, assume 5% for the cost of debt.

2. What is the market value of its common stock?

3. Assume that AT&T's capital structure has only 2 components: long-term debt and common stock. Furthermore, assume that the market value of the debt equals the book value from (1). What is AT&T's total market value? What are the weights for the debt and equity? (Recall weights must sum to 1.)

4. Figure out AT&T's tax rate from the annual report. Use this tax rate to compute its after-tax cost of debt.

5. Use the CAPM to calculate AT&T's cost of common equity. You can assume a market risk premium of 5%. You can use the 10-year Treasury bond as a proxy for the risk-free rate. You will need a value for beta: do not calculate it but get it up online instead.

6. Using the weights from (4) and the required returns from (5) and (6), calculate AT&T's weighted cost of capital.