If it were unlevered, the overall firm beta for Wild Widgets Inc. (WWI) would be 0.8. WWI has a target debt/equity ratio of 1. The expected return on the market is 0.1, and Treasury bills are currently selling to yield 0.03. WWI one-year bonds (with a face value of $1,000) carry an annual coupon of 2% and are selling for $955.68. The corporate tax rate is 34%. (Round your answers to 2 decimal places before the percentage sign. (e.g., 10.23%))
a. WWI’s before-tax cost of debt is _________________%.
b. WWI’s cost of equity is ____________________%.
c. WWI’s weighted average cost of capital is _____________%.