Barton Industries expects that its target capital structure for raising funds in the future for its capital budget will consist of 40% debt, 5% preferred stock, and 55% common equity. Note that the firm's marginal tax rate is 40%. Assume that the firm's cost of debt, r_d, is 8.2%, the firm's cost of preferred stock, r_ps, is 7.7% and the firm's cost of equity is 12.2% for old equity, r_s, and 12.73% for new equity, r_e.

What is the firm's weighted average cost of capital (WACC₁) if it uses retained earnings as its source of common equity? Round your answer to 3 decimal places. Do not round intermediate calculations.

What is the firms weighted average cost of capital (WACC₂) if it has to issue new common stock? Round your answer to 3 decimal places. Do not round intermediate calculations.