$1.$ Calculate the after$-$tax weighted$-$average cost of capital $($WACC$)$ for Capstone$$s Incorporated based on the following information:

Debt: $$150$ million book value outstanding. The debt is trading at $80\%$ of book value. The yield to maturity is $10\%.$

Equity: $$50$ million book value. $3$ million shares outstanding traded at $$80$ per share on NYSE. Assume the expected rate of return on Capstone$$s stock is $20\%.$

Marginal tax rate is Tc $=35\%.$

$2.$ Suppose Capstone is evaluating a project that has the same business risk as the company but a higher target debt ratio of $50\%($D$/$V $=50\%).$ As a result, the best interest rate the project can get from lenders is $12\%.$ Use the three$-$step procedure introduced in class to compute the project$$s after$-$tax WACC?