Chapter 16 - Review Problems (G... 4 20 points eBook 100 Hint References Problem 16-15 MM and Taxes Saved a. Cost of equity b. WACC Help % % Save & Exit Submit Fields & Company expects its EBIT to be $91,000 every year forever. The company can borrow at 7 percent. The company currently has no debt and its cost of equity is 12 percent. The tax rate is 22 percent. The company borrows $150,000 and uses the proceeds to repurchase shares. Check my work 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., 32.16.) b. What is the WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)