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The stock of Thai Restaurants of Texas (commonly known as TRT) is currently selling for $100 per share. TRT bonds are zero-coupon bonds that currently

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The stock of "Thai Restaurants of Texas" (commonly known as TRT) is currently selling for $100 per share. TRT bonds are zero-coupon bonds that currently trade at $800 per bond, with the face value being $1,000 and the maturity of the zero-coupon bonds being 5 years. The beta for TRT's stock is 0.6. The yield on a 10 -year Treasury bond is 3.5%. The expected return for the stock market is 11%, but the stock market has had an average annual return of 17% during the past 5 years. TRT is in the 20% tax bracket. There are 20,000 bonds outstanding as well as 2,000,000 common shares. a.) Using the CAPM approach, what is the estimate for the cost of equity for TRT? b.) What is the estimate for the after-tax cost of debt for TRT? c.) What are the estimated weights to be used when calculating the WACC? d.) What is the best estimate of the WACC for TRT

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