The total market value of AB stocks is $6.000.000 and the total market value of its risk- free debt is $4.000.000. The financial analyst estimates the beta of the stocks at 1.5 and the market premium at 10% for a risk-free rate of 8%. a) Evaluate the expected return (cost of equity) of the AB stocks. b) If the company has a beta equals to 0.9, estimate the cost of capital of the company. c) Suppose that AB pays back $3.000.000 of its debt and replace them by preferred shares with a beta of 1.2. The new beta of the company becomes then equal to 1.26. What is the new weighted average cost of capital?