The Pioneer Petroleum Corporation wants to purchase a new asset costing $10 million.Their market value capital structure, shown below, is considered to be optimal (assume there is no short-term debt):Long-term Debt = $12,600,000, Common Equity = $18,900,000, and Total Capital =$31,500,000.Jackson expects its earnings (and its dividends) to continue to grow at their historical rate of 5% per year for the indefinite future.The current risk-free rate is 7.8% and the expected return on the S&P 500 Index is 16.25%.Jackson's appropriate levered equity beta is 0.80.Their bonds are currently trading at $1000 per bond, have a par value of $1000, an annual coupon rate of 12%, and a term to maturity of 12 years.Thus, the YTM on this bond is consistent with the current Debt Risk Premium between the S&P 500 Composite and long-term, high-grade bonds of 4.2%. The firm's tax rate is 34%.

a)Calculate Pioneer's cost of equity

b)Calculate Pioneer's cost of debt

c)Calculate Pioneer's weighted average cost of capital (WACC).