Your company is financed 40% with debt and 60% with equity. The internal rate of return on the company's debt is 7%, the equity has a beta of 1.5. The risk-free rate of return is 5% and the market risk premium is 6%. The corporate tax rate is 40%.

a. What is the company's cost of capital or unlevered cost of equity? (5 points)

b. What is the company's weighted average cost of capital (WACC)? (5 points)