The Following Financial Statement Data Pertains to Outside, Inc Required:
A

The following financial statement data pertains to Outside, Inc., a manufacturer of men's outerware (dollar amounts in millions):
$\begin{array}{llcc} \text { Total Assets } &\$145,782 \\ \text { Interest-Bearing Debt} &\$30,659\\ \text { Average Pre-tax borrowing cost } &9.25\%\\ \text { Common Equity: } &\\ \text { Book Value } &\$22,515\\ \text { Market Value} &\$60,843\\ \text { Income Tax Rate } &42\% \\ \text { Market Equity Beta } &0.88\\ \text { Market Premium } &8.5\%\\ \text {Risk-free interest rate } &2.4\%\\\end{array}$
Required:
a. Calculate the company s cost of equity capital.
b. Calculate the weight on debt capit al that should be used to determine Outside'sweightech-average cost of capital.
c. Calculate the weight on equity capital that should be used to determine Outside'sweighted-average cost of capital.
d. Calculate Outside's weighted-average cost of capital.