ABC Company and $xYZ$ Company are identical firms in all respects except for their capital structure. ABC is all$-$equity financed with

$$850,000$ in stock. XYZ uses both stock and perpetual debt; its stock is worth $$425,000$ and the interest rate on its debt is $7$ percent.

Both firms expect EBIT to be $$95,000.$ Ignore taxes.

a$.$ Rico owns $$85,000$ worth of $xYZ\text{'}$s stock. What rate of return is he expecting?

Note: Do not round intermediate calculations and enter your answer as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.$

b$.$ Suppose Rico invests in ABC Company and uses homemade leverage. Calculate his total cash flow and rate of return.

Note: Do not round intermediate calculations and enter your rate of return answer as a percent rounded to $2$ decimal places,

e$.$g$.,32\mathrm{.}16.$

c$.$ What is the cost of equity for ABC and $xYZ?$

Note: Do not round intermediate calculations and enter your answers as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.$

d$.$ What is the WACC for ABC and XYZ$?$

Note: Do not round intermediate calculations and enter your answers as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.$