Thunderhorse Oil. Thunderhorse Oil is a U$.$S$.$ oil company. Its current cost of debt is $7\mathrm{.}30\%,$ and the $10-$year U$.$S$.$ Treasury yield, the proxy for the risk$-$free rate of interest, is $3\mathrm{.}90\%.$ The expected return on the market portfolio is $8\mathrm{.}20\%.$ The company's effective tax rate is $38\%.$ Its optimal capital structure is $70\%$ debt and $30\%$ equity.

a$.$ If Thunderhorse's beta is estimated at $1\mathrm{.}20,$ what is Thunderhorse's weighted average cost of capital?

b$.$ If Thunderhorse's beta is estimated at $0\mathrm{.}90,$ significantly lower because of the continuing profit prospects in the global energy sector, what is Thunderhorse's weighted average cost of capital?

a$.$ If Thunderhorse's beta is estimated at $1\mathrm{.}20,$ what is Thunderhorse's weighted average cost of capital?

$\%($Round to two decimal places.$)$