Kunitz Co. has no debt. Its cost of capital is 8.7 percent. Suppose Kunitz converts to a debt-equity ratio of 1.0. The interest rate on the debt is 6.3 percent. Ignore taxes for this problem.

Requirement 1:

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

Cost of equity

%

Requirement 2:

What is its new WACC? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

WACC

%