A small company in the business of producing and selling musical CDs and cassettes and it is also involved in promoting concerts . JP's stock has been listed on the NASDAQ for the last two years and is trading at twice the book value of equity . (The book value of equity is $ 120M). JP derives 75% of its total market value from its ecord / (CD) business and 25 % from the concert business . While the price data on the company is insufficient to estimate a beta , the beta of comparable firm in these businesses is as follows . Business Record / (CD) Concert Business Average asset beta 0.88 1.13 The debt is composed of ten year bonds of 60M at maturity with annual coupon payment of 5M per year and is rated A typical A rated bonds are yielding 10% currently in the market )The current risk free rate is 8 % and market risk premium is 5.5% . Assume no corporate taxes

a. Estimate the current cost of equity ?

b. Estimate the current weighted average cost of capital ?