A farmer in Texas USA has provided the following information from his farm records:

Total asset value $200,000

Total debt value $50,000 Tax rate: 37.5% Proportion of noncash items subject to tax: 30% Cash return to equity: 7% Increase in value of assets 5% Average cost of debt: 11%

a. Calculate the after tax return to equity

b. Calculate the weighted average cost of capital (use 2 decimal places)