You have been approached by your line manager to consult their concerned with after$-$tax cash flows, so we need to consider the effect of taxes on the various costs of capital. For example, interest expense reduces tax liability. While the reduction in taxes reduces the cost of debt. They provide you with the following information:

Equity information

$50$ million shares

$$80$ per share

Beta $=1\mathrm{.}15$

Market risk premium $=9\%$

Risk$-$free rate $=5\%$

Debt information

$$1$ billion in outstanding debt $($face value$)$

Current quote $=110$

Coupon rate $=9\%,$ semiannual coupons

$15$ years to maturity

Tax rate $=40\%$