You are opening a Mexican restaurant in the midtown. Given below financial information of your company, please answer the following questions,

Loan amount: $400,000

Interest expenses: $50,000

Tax rate: 20%

Equity financing: $400,000

Equity partner share: 40%

Net income: $200,000

How much is the cost of debt?

1. 8.5%
2. 10%
3. 12.5%
4. 14%

How much is the cost of equity?

1. 10%
2. 20%
3. 30%
4. 40%

How much is the weight of debt?

1. 12.5%
2. 20%
3. 40%
4. 50%

How much is the weight of equity?

1. 50%
2. 60%
3. 80%
4. 88.5%

How much is the weighted average of cost (WACC)?

1. 5%
2. 10%
3. 15%
4. 20%