WACC exercise We have the following information about the capital structure of a firm: Equity Information: 50 million shares $80 per share Beta = 1.15 Market risk premium = 9% Risk-free rate = 5% Debt Information: $1 billion in outstanding debt (face value) Current price = 1100USD Coupon rate = 9%, . semiannual coupons 15 years to maturity The firm's tax rate is 40% So: A) What is the cost of debt? B) What is the cost of equity (using the CAPM)? C) What is the AFTER-TAX cost of debt? D) What are the capital structure weights? E) Compute the Weighted Average Cost of Capital (the WACC)