Question 7 - WACC [4 points]: You were hired as a consultant to Giambong Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of retained earnings is 12.75%. The firm will not be issuing any new stock. What is its WACC? Question 8 - WACC 14 points]: Midwest Electric Company (MEC) uses only debt and retained earnings. It can borrow unlimited amounts at an interest rate of ra -10% as long as it finances at its target capital structure, which calls for 40% debt and 60% common equity. Its last dividend was $2 (i.e., Do - $2), its expected constant growth rate is 4%, and its common stock sells for $20. MEC's tax rate is 40%. What is its WACS