You are trying to estimate the cost of capital for WHUT Shipping, and have collected the following information:

- The firm has $ 750 million in interest-bearing debt on its books, on which it pays $40 million in annual interest expenses. The weighted average maturity of the debt is 5 years.

- The bond rating for the firm is A-, and the default spread over the T.Bond rate is 2%.

- There are 200 million shares outstanding, trading at $10 a share.

- The unlevered beta for other shipping firms is 0.80.

- The ten-year T.Bond rate is 5.2% and the market risk premium is 5.17%.

- The marginal tax rate is 40%.

a. Estimate the market value of the interest-bearing debt.

b. Estimate the cost of equity for the firm.

c. Estimate the cost of capital forthe firm.