The case of Cute Camel Woodcraft Company Cute Camel Woodcaft Company has a target capital structure of 45% debL, 4% preferred stock, and S1\% common equity. It has a before-tax cost of debt of 8.2%, and its cost of preferred stock is 9.3%. If Cute Camel can raise all of its equity capital from retained earnings, its cost of common equity will be 12.4%6. Howerir, if it is necessary to raine new common equity, it will carry a cost of 14.2%. If its current tax rate is 40%, how much higher will Cute Camei's weiohted average cost of capital (WAcC) be if it has to raise additional common equity capital by issuing new common stock inntead of raising the funds through retained eamings? (Note: Round your answer to two decimal place. ) 1.15% 1.241 0.8371 0.9254 The case of Purple Lemon Shipbuilders The CFO of Purple Lemon Shipbuilders is trying to determine the company's WacC. He has determined that the company's before-tax cost of debt is 11.10%. The company currently has $100,000 of debt, and the CFO believes that the book value of the company's debt is a good approximation for the market value of the company's debt. - The firm's cost of preferred stock is 12.20%, and the book value of preferred stock is $10,500. - Its cost of equity is 14.70%, and the company currently has $85,000 of common equity on its balance sheet. - The CFO has estimated that the firm's market value of preferred stock is $30,000, and the market value of its common equity is $140,000. If Purple Lemon is subject to a tax rate of 40%, Purple Lemon Shipbulders's WaCc is (Hint: Round your answer to two decimal places.)