Use the information to answer the following questions. The XXX Company has a marginal tax rate of 30%. The company can issue new bonds at par that would provide a 9% YTM. The firms beta is 1.1, the T-bill rate is 5%, and the market return is 11%. The firms long-term debt currently sells at par value for $1,500. The firm has 500 shares of common stock outstanding that sell for $10 per share. Continued from previous question. What is XXXs capital structure based on market weights?

a. 71.43% in debt, 28.57% in equity.

b. 23.08 in debt, 76.92% in equity.

c. 48.50% in debt, 51.50% in equity.

d. 45.23% in debt, 54.77% in equity.

e. 70% in debt, 30% in equity.

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

Select one:

a. 13.95%

b. 7.51%

c. 10.38%

d. 9.90%

e. 12.70%