Use the following information for the next six questions:

• A firm has 2 million shares of common stock outstanding, currently selling at $60 per share.
• It is expected to have EPS and dividends per share at the end of the current year in the amounts of $4 and $2.45, and a Return on Equity of 10%.
• It also has $100 Million par value of debt on its books, which is currently selling at a 5% discount to par. The debt is 20-year debt with a 4% annual coupon rate.
• The firm has ROE of 10% and a 25% marginal tax rate
• The firms regular (non-adjusted) beta is 2.0, the current YTM on treasuries is 3%, and the market risk premium is 4%
• The firm has a size beta of 0.20, a value beta of 0.50 and a liquidity beta of 0.15 -- historical returns on various subsets of firms are as follows:

Subset	Historical Average return
Small Firms	14%
Large Firm	10%
Value Firms	13%
Growth Firms	9.5%
Very Liquid firms	9%
Illiquid firms	13.5 %

1. What are the weights of debt and equity for the firm?
2. What is the cost of equity based on the Fama-French Model?
3. What is the cost of equity based on the Pastor-Stambaugh model?
4. What is the cost of equity based on the Gordon-Growth (i.e. constant growth) model?
5. What are the before and after-tax costs of debt?
6. What is the WACC for the firm using the Gordon-growth models cost of equity and the weights from question #22?