The market value of XYZ Corporation's common stock is $40 million and the market value of its debt is $60 million. The beta of the company's common stock is 0.8, and the expected market risk premium is 10%. If the Treasury bill rate is 6% and the current yield-to- maturity of the company's bond is 7%, 56 57 a. Assume no taxes, what is the cost of debt AND cost of equity for XYZ? (0.5) 58 59 Cost of debt Cost of equity 61 Answer 63 b. Assume no taxes, what is the firm's cost of capital? (1) 69 Answer 71 C. Now assume tax rate is 30%, what is the WACC? (1) 12//2017 SONY