(a) Rollins' target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Its before-tax cost of debt is 12%. The firm's cost of preferred stock is 12.6%. Rollins' beta is 1.2, the riskfree rate is 10%, and the market rate of return is 15%. The firm's marginal tax rate is 25 percent. 1) What is Rollins' cost of retained earnings using the CAPM approach? ii) What is Rollins' WACC