Pacific Intermountain Utilities Company has a present capital structure (which the company feels is optimal) of 30 percent long-term debt, 8 percent preferred stock, and 62 percent common equity. For the coming year, the company has determined that its optimal capital budget can be externally financed with $55 million of 14 percent first-mortgage bonds sold at par and $20 million of preferred stock costing the company 15 percent. The remainder of the capital budget will be financed with retained earnings. The companys common stock is presently selling at $15 a share, and next years common dividend, D1, is expected to be $2 a share. The company has 22 million common shares outstanding. Next years net income available to common stock (including net income from next years capital budget) is expected to be $90 million. The companys past annual growth rate in dividends and earnings has been 7 percent. However, a 4 percent annual growth in earnings and dividends is expected for the foreseeable future. The companys marginal tax rate is 40 percent. Round your answer to two decimal places. 10.12% would be shown as 10.12.

What is the cost of equity? %

What is the WACC? %