Part B: Short Answer (35 marks) 1) ABC Corp's WACC (a) ABC Corp shares are currently trading at $69.25 each. The yield on the company's debt is 4% and the firm's beta is 0.25. The T-Bill rate is 4% and the expected return on the market (E (km)) is 11%. The company's target capital structure is 20% debt and 80% equity. The company pays a combined income tax rate of 20%. The GST rate is 13%. What is ABC's cost of equity? Show your work and provide a statement clearly indicating your answer. (5 marks) (b) Using the information outlined above, calculate ABC's cost of debt (after tax). Show your work and provide a statement clearly indicating your answer. (5 marks) (c) What is ABC's weighted average cost of capital? Show your work and provide a statement clearly indicating your answer. (5 marks) (d) ABC's key rival, Neil Corp has a 7 percent preferred stock outstanding that is currently selling for $48 a share. The preferred stock has a $100 par value. The market rate of return is 10 percent and the firm's tax rate is 34 percent. GST is 13%. What is Neil Corp's cost of preferred stock? Show your work and provide a statement clearly indicating your answer. (5