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Gamer Co. has no debt. Its cost of capital is 10 percent. Suppose the company converts to a debtequity ratio of 1. The interest rate

Gamer Co. has no debt. Its cost of capital is 10 percent. Suppose the company converts to a debtequity ratio of 1. The interest rate on the debt is 7.1 percent. Ignore taxes for this problem.

1. What is the companys new cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

2. What is its new WACC?

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