1.Situational Software Co. (SSC) is trying to establish its optimal capital structure. Its current capital structure consists of 25% debt and 75% equity; however, the CEO believes that the firm should use more debt. The risk-free rate, r_RF, is 4%; the market risk premium, RP_M, is 6%; and the firm's tax rate is 25%. Currently, SSC's cost of equity is 15%, which is determined by the CAPM. What would be SSC's estimated cost of equity if it changed its capital structure to 50% debt and 50% equity? Do not round intermediate calculations. Round your answer to two decimal place.

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2.Hartman Motors has $12 million in assets, which were financed with $6 million of debt and $6 million in equity. Hartman's beta is currently 2, and its tax rate is 20%. Use the Hamada equation to find Hartman's unlevered beta, b_U. Do not round intermediate calculations. Round your answer to two decimal places.