17. Blue Sky Corporation has a capital structure of 40% debt and 60% common equity. This capital structure is expected not to change. The firm's tax rate is 34%. The firm can issue the following securities to finance capital investments:

Debt: Capital can be raised through bank loans at a pretax cost of 9.9%. Also, bonds can be issued at a pretax cost of 7.3%.

Common Stock: Retained earnings will be available for investment. In addition, new common stock can be issued at the market price of $84. Flotation costs will be $4 per share. The recent common stock dividend was $8.83. Dividends are expected to grow at 5% in the future.

What is the cost of capital if the firm uses bonds and issues new common stock?

PLEASE INPUT THE ANSWER IN PERCENT ROUNDING IT TO 2 DECIMALS. DO NOT INCLUDE % SIGN, E.G., INSTEAD OF 9.99% INPUT 9.99

18. Blue Sky Corporation has $48,000,000 in equipment that has a 14 year class life. The equipment is 3 years old. Blue Sky is selling the equipment for $19,000,000. Eastern uses simplified straight line depreciation (zero salvage value) and has a marginal tax rate of 34%. What is the terminal cash flow? Assume no working capital. ENTER YOUR ANSWER IN THE SPACE PROVIDED. DO NOT ENTER THE DOLLAR SIGN.