Use the following information to answer the next three questions. Clara's Art Gallery finances its assets using both debt and equity. Its long-term bonds currently yield 5%. Its stock currently has a B of 0.75. The market risk premium is 6%, and T-bills currently yield 2%. The firm has 1,000,000 shares of common stock outstanding selling at $40/share. The company has 10,000 bonds outstanding, which sell at a 5% discount to par ($1,000). The tax rate is 20%. 16. Approximately what percentage of the firm's total capital is equity? A. 19% B. 24% C. 50% D. 76% E. 81% 17. Calculate Clara's expected return on her company's stock. A. 5.5% B. 6.0% C. 6.5% D. 7.0% E. 7.5% 18. What is the weighted average cost of capital for Clara's Art Gallery? A. 5.0% B. 5.5% C. 5.7% D. 6.0% E. 6.2%