20) The following table gives Foust Company's earnings per share for the last 10 years. The common stock, 8.8 million shares outstanding, is now (1/1/17) selling for $58 per share. The expected dividend at the end of the current year (12/31/17) is 45% of the 2016 EPS. Because investors expect past trends to continue, g may be based on the historical earnings growth rate. (Note that 9 years of growth are reflected in the 10 years of data.)

Year	EPS		Year	EPS
2007	$3.90		2012	$5.73
2008	4.21		2013	6.19
2009	4.55		2014	6.68
2010	4.91		2015	7.22
2011	5.31		2016	7.80

The current interest rate on new debt is 8%; Foust's marginal tax rate is 40%; and its target capital structure is 35% debt and 65% equity.

1)

A. Calculate Foust's after-tax cost of debt. Round your answer to two decimal places. %________ B. Calculate Foust's cost of common equity. Calculate the cost of equity as rs = D1/P0 + g. Round your answer to two decimal places. Do not round your intermediate calculations. %________

2) Find Foust's WACC. Round your answer to two decimal places. Do not round your intermediate calculations. %________