Calculate the cost of capital for EcoE Barusing weighted average cost of capital of debt and equity, and Miller and Modigliani proposition incorporating corporate tax.Explain, which of the cost of equities calculated in question 2 (using the DGM or the CAPM) is used?Why thecapital asset pricing model is not used to estimate the firm’s cost of capital directly?(25marks)

Calculate the cost of capital for EcoE Barusing weighted average cost of capital of debt and equity, and Miller and Modigliani proposition