The data shown in the table below are from a rating agency and indicate the spread over risk free rate allocated to businesses because of their leverage.

Debt ratio D/V	Spread (bp)
< 20%	40
20% - 30%	70
30% - 40%	110
40% - 50%	160
50% - 60%	245
> 60%	280

a) Calculate the weighted average cost of capital of a firm which is known the following: equity beta 1.25, D/E = 1/3, corporate tax rate 16%, risk-free return on assets 5%, market expected return 10%.

b) Calculate the beta of debt of a company knowing that E/V = 2/3, corporate tax rate is 20%, risk-free return on assets 4.4% and market risk premium of 6%.