ABC is an all-equity firm with $600,000 equity value. XYZ uses both stock and perpetual debt. The market value of equity of XYZ is 50% of the equity value of ABC and the interest rate on debt is 8%. It is expected that EBIT forever to be $90,000 per year for both firms. ABC and XYZ are identical in all aspects except for the capital structure. Both ABC and XYZ are in an economy with no corporate tax. What are the cost of equity and WACC for ABC and XYZ?