Assume the M&M world with perfect capital markets. Your firm is levered with 40% debt and 60% equity. The firm’s cost of debt is 5% regardless of leverage. Under the current capital structure, the firm’s cost of equity is 15%.1. What is the firm’s current cost of capital (i. e. pre-tax WACC)?A. 18%B. 20%C. 15%D. 11%2. What would be the firm’s cost of capital if the firm were unlevered?A. 18%B. 15%C. 11%D. 20%