The XXX Company has a marginal tax rate of 40%.

The company can issue new bonds at par that would provide a 8.5% YTM.

The firms beta is 0.7, the T-bill rate is 5%, and the market return is 12%.

The firms long-term debt currently sells at par value for $3,000.

The firm has 100 shares of common stock outstanding that sell for $10 per share.

Based on the information above:

1) What is XXXs capital structure based on market weights?

2) What is the firm's weighted average cost of capital?

Please explain your reasoning. Thank you.