Use the information to answer the following questions.

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 firm's beta is 0.7, the T-bill rate is 5%, and the market return is 12%.

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

The firm has 700 shares of common stock outstanding that sell for $10 per share.

What is XXX's cost of common stock?

Select one:

a.10.36%

b.9.90%

c.21.08%

d.14.80%

e.8.80%

Continued from previous question. What is the firm's weighted average cost of capital?

Select one:

a.8.46%

b.7.20%

c.6.30%

d.5.70%

e.5.59%