Acort Industries has10 million shares outstanding and a current share price of $ 40 per share. It also haslong-term debt outstanding. This debt is riskfree, is four years away frommaturity, has an annual coupon rate of 9%, and has a $112 million face value. The first of the remaining coupon payments will be due in exactly one year. The riskless interest rates for all maturities are constant at 5.4 %. Acort has EBIT of$105 million, which is expected to remain constant each year. New capital expenditures are expected to equal depreciation and equal $17 million peryear, while no changes to net working capital are expected in the future. The corporate tax rate is 45% and Acort is expected to keep itsdebt-equity ratio constant in the future(by either issuing additional new debt or buying back some debt as time goeson).

a. Based on thisinformation, estimateAcort's WACC.

b. What isAcort's equity cost ofcapital?

Round 2 Decimal Places.