A firm currently has a debt-equity ratio of 1. The debt, which is virtually riskless, pays an interest rate of 7 %. The expected rate of return on the equity is 11 %. What is the Weighted-Average Cost of Capital if the firm pays no taxes? Enter your answer as a percentage rounded to two decimal places. Do not include the percentage sign in your answer.

WACC = Correct response: 90.02

What would happen to the expected rate of return on equity if the firm changed its debt-equity ratio to 1/3 ? Assume the firm pays no taxes, the cost of debt does not change, and that the original WACC is 9.00 %. Enter your answer as a percentage rounded to two decimal places. Do not include the percentage sign as part of your answer

Return on equity =