GIVEN ABOUT THE MARKET:

T$-$bill return is $3\mathrm{.}5\%$ annually.

The expected annual return on the market portfolio equals $10\%.$

GIVEN ABOUT THE "GAMMA CORPORATION":

Gamma Corporation's capital structure is levered. $($If Gamma Corporation was not levered, its equity Beta would have been $1\mathrm{.}05.)$

Gamma Corporation would like to maintain a target debt$-$to$-$equity ratio of $\mathrm{.}70$ which is its current level.

Gamma Corporation has debt in the form of corporate bonds. The bonds mature in $28$ years, each bond has a $$2,000$ par value, and the coupon rate of $6\mathrm{.}2\%.$ The bonds require that the coupons are made semiannually until the bonds mature. Each bond can be traded for $$2,110$ in today's economy.

Gamma Corporation faces a $21\%$ tax rate on its taxable income.

a$.$

Gamma Corporation's cost of debt $($HINT: "annual yield to maturity"!$)$ is $\_\_\_\_$: $($Do not round intermediate calculations and enter your answer as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

b$.$ Gamma Corporation's cost of equity is $\_\_\_\_$: $($Do not round intermediate calculations and enter your answer as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

c$.$ Gamma Corporation's WACC is $\_\_\_\_\_$