Problem 16-15 MM and Taxes [LO2] Meyer & Co. expects its EBIT to be $123,000 every year forever. The firm can borrow at 7 percent. The company currently has no debt, and its cost of equity is 13 percent and the tax rate is 25 percent. The company borrows $174,000 and uses the proceeds to repurchase shares. a. What is the cost of equity after recapitalization? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)