eyer & Co. expects its EBIT to be $151,000 every year forever. The firm can borrow at 6 percent. At the moment the companyhas no debt, and its cost of equity is 13 percent.The tax rate is 22 percent. The company borrows $195,000 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., 32.16.)

b.What is the WACC afterrecapitalization?(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

cost of equity?

wacc?