HCP Sare EXIZ submit St. Louis Co, and St. Romuald Co are identical firms in all respects except for their capital structure St. Louis is all-equity financed with $780,000 in stock. St. Romuald uses both stock and perpetual debt; its stock is worth $390,000 and the interest rate on its debt is 8%. Both firms expect EBIT to be $87,000 Ignore taxes. a. Clifford owns $48,750 worth of St. Romuald's stock. What rate of return is he expecting? (Enter your answer as a percentage rounded to 2 decimal places.) Rate of return b. Suppose Clifford invests in St. Louis Co. and uses homemade leverage Calculate his total cash flow and rate of return. (Round rate of return answer as a percent rounded to 2 decimal places. Ornir $ sign in your response.) Total cash flow $ 6975 Rate of return 14.31% c. What is the cost of equity for St. Louis and St. Pomuald? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places.) Cost of equity 11.15 % St. Louis St. Romuald 14.312 b. Suppose Clifford invests in St. Louis Co, and uses homemade leverage Calculate his total cash flow and rate of return (Round rate of return answer as a percent rounded to 2 decimal places. Omit $ sign in your response) Total cash flow 6975 14.31 96 Rate of return ok c. What is the cost of equity for St. Louis and St. Romuald? (Do not round imermediate calculations. Enter your answer as a percentage rounded to 2 decimal places.) nt nces St. Louis St. Romuald Cost of equity 11.15 98 14.31 26 d. What is the WACC for St. Louis and St. Romualb? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places.) WACC DA St. Louis 00 St. Romuald