1A: The Black Bird Company plans an expansion. The expansion is to be financed by selling $88 million in new debt and $157 million in new common stock. The before-tax required rate of return on debt is 9.04% percent and the required rate of return on equity is 19.42% percent. If the company is in the 34 percent tax bracket, what is the weighted average cost of capital?

Round the answer to two decimal places in percentage form.

1B:

Garden Tools Inc. has bonds, preferred stock, and common stocks outstanding. The number of securities outstanding, the current market price, and the required rate of return for these securities are stated in the table below. The firms tax rate is 35%.

Calculate the firm's WACC adjusted for taxes using the market information in the table.

Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box)

	The Number of Securities Outstanding	Selling price	The Required Rate of Return
Bonds	1,885	$1,051	10.19%
Preferred Stocks	4,152	$55.94	16.02%
Common Stocks	1,215	$55.25	12.84%