Katara Holdings, Ltd. Long-term Liabilities Katara has issued a 5-year, 6% bond for $500,000. Katara also has a mortgage on the office building. The 20-year mortgage has a remaining balance of $1,250,000 and a fixed interest rate of 5.5%. Equity Katara has both Common Stock and Preferred Stock outstanding. There are 15,000 shares of $100 par 9% Preferred Stock outstanding. There are 75,000 shares of Common Stock outstanding, carried at $2,500,000. Katara's common shareholders generally expect about a 15% return on their investment via quarterly dividends. 1.Calculate the cost of DEBT capital for Katara and for Sokka. 2.Calculate the cost of EQUITY capital for each firm. 3.Calculate the CAPITAL STRUCTURE for each firm. 4.Calculate the COST OF CAPITAL for each firm. 5. Based on what you computed above, which firm do you think is the riskier investment? Why do you think sr so?