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WACC and Current Bond Price

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If Wild Widgets, Inc, were an all-equity co, it would have a beta of 1.1. The co. has a target debt-equity ratio of .40. The expected return on the market portfolio is 13 percent, and the treasury bills currently yield 7 percent. The company has one bond issue outstanding that matures in 20 years and has a 9 percent coupon rate. The bond currently sells for $975. The corporate tax rate is 34%
a. What is the company's cost of debt?
b. What is the company's cost of equity?
What is the company's weighted average cost of capital?

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a.
To determine the cost of debt use the following formula in Excel:
=RATE(Periods, Coupon Payment, Price, ...

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