Now calculate the cost of common equity from retained earnings, using the CAPM method.

fill in the blank $6$

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What is the cost of new common stock based on the CAPM? $($Hint: Find the difference between re and rs as determined by the DCF method, and add that differential to the CAPM value for rs$.)$

fill in the blank $7$

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If Skye continues to use the same market$-$value capital structure, what is the firm's WACC assuming that $(1)$ it uses only retained earnings for equity and $(2)$ if it expands so rapidly that it must issue new common stock? $($Hint: Use the market value capital structure excluding current liabilities to determine the weights. Also, use the simple average of the required values obtained under the two methods in calculating WACC.$)$

WACC$1$: fill in the blank $8$

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WACC$2$: fill in the blank $9$

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