Suppose a start-up young company with all-equity financing has a cost of equity (rE) of 13%. Now the company tries to refinance to the following market value capital structure: Debt (D) ratio 40% and Equity (E) ratio 60%. The cost of debt (ra) is 7%. The tax rate is 35%. Please answer the following two questions: 1. Calculate the new cost of equity re and the after-tax weighted average cost of capital (WACC). 2. Now suppose if the firm continues to issue additional 10debt to replace equity, what's the new and WACC? (assume the cost of debt ra increases from 7% to 7.8%, caused by larger debt ratio)