WACC You have collected the following information about your firm. Its 50 million shares of common stock have a book val

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WACC
You have collected the following information about your firm.
Its 50 million
shares of common stock have a book value of $1 per share and a
current
market price of $42 per share. The stock has a return standard
deviation of .25
and beta of 1.10. The expected return for the market portfolio
is 8% and the T-
bill rate is 2%. The firm's outstanding bonds have a total face
value of $600
million, maturity of 6 years, semi-annual 5% coupon, and a
current price of
102% of par value. The marginal tax rate is 40%.
• What is the weight of
equity?
• What is the weight of
debt?
• What is the cost of
equity?
• What is the cost of
debt?