Cede & Co$.$ expects its EBIT to be $$65,000$ every year forever. The firm can borrow at $9$

percent. The firm currently has no debt, its cost of equity is $15$ percent, and the tax rate is

$22$ percent. Assume the firm borrows $$173,000$ and uses the proceeds to repurchase

shares.

a$.$ What is the cost of equity after recapitalization? $($Do not round intermediate

calculations and enter your answer as a percent rounded to $2$ decimal places, e$.$g$.,$

$32\mathrm{.}16.)$

b$.$ What is the WACC? $($Do not round intermediate calculations and enter your answer

as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$