Empire Electric Company (EEC) uses only debt and common equity. It can borrow unlimited amounts at an interest rate of rd = 10% as long as it finances at its target capital structure, which calls for 45% debt and 55% common equity. Its last dividend (D0) was $2.75, its expected constant growth rate is 4%, and its common stock sells for $28. EEC's tax rate is 40%. Two projects are available: Project A has a rate of return of 13%, and Project B's return is 9%. These two projects are equally risky and about as risky as the firm's existing assets.

a-What is its cost of common equity? Round your answer to two decimal places. Do not round your intermediate calculations.

b- What is the WACC? Round your answer to two decimal places. Do not round your intermediate calculations.