1. An analyst has collected the following information regarding Christopher Co .: The company's capital structure is 70 percent equity, 30 percent debt. The yield to maturity on the company's bonds is 5 percent. The company's year-end dividend (D_{1}) is forecasted to be $ 1.0 a share. The company expects that its dividend will grow at a constant rate of 7 percent a year . The company's stock price is $25. The company's tax rate is 40 percent . The company anticipates that it will need to raise new common stock this year. Its investment bankers anticipate that the total flotation cost will equal 10 percent of the amount issued. Assume the company accounts for flotation costs by adjusting the cost of capital Given this information, calculate the company's WACC

2. Rollins Corporation is estimating its WACC. Its target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Rollins' beta is 1.7 the risk-free rate is 5 percent, and the market risk premium is 4 percent. Rollins is a constant-growth firm which just paid a dividend of $2.00, sells for $ 34 per share, and has a growth rate of 7 percent. The firm's policy is to use a risk premium of 4 percentage points when using the bond- yield-plus-risk-premium method to find r_{s} The firm's marginal tax rate is 38 percent. What is Rollins cost of equity when using the CAPM approach (aka SML equation)? Express your answer in percentage (without the % sign ) and round it to two decimal places.