1/ MomCorp Inc. has the following balances in its capital accounts as of 12/31/X3:

Long-term debt	$65,000,000
Preferred stock	15,000,000
Common stock	40,000,000
Paid in excess	15,000,000
Retained earnings	37,500,000

The company's long-term debt is comprised of 20-year $1000 face value bonds issued 7 years ago at an 8% coupon rate. The bonds are now selling to yield 6%. Willerton's preferred is from a single issue of $100 par value, 9% preferred stock that is now selling to yield 8%. Willerton has 4 million shares of common stock outstanding at a current market price of $31.

Assume the firm's cost of retained earnings is 17% and its marginal tax rate is 36%. Assume that the coupon payments are semi-annual.

a. Calculate its WACC using its book-value-based capital structure ignoring flotation costs. Round the answer to two decimal places. Do not round your intermediate calculations. Do not include the "%".

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b. Make the same calculation using the market-value-based capital structure. Round the answer to two decimal places. Do not round your intermediate calculations. Do not include "%".

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