The following table gives Zeke Company's earnings per share for the last 10 years. The common stock, 7.9 million shares outstanding, is now (1/1/19) selling for $57 per share. The expected dividend at the end of the current year (12/31/19) is 45% of the 2018 EPS. Because investors expect past trends to continue, g may be based on the historical earnings growth rate. (Note that 9 years of growth are reflected in the 10 years of data.)

Year	EPS		Year	EPS
2009	$3.90		2014	$5.73
2010	4.21		2015	6.19
2011	4.55		2016	6.68
2012	4.91		2017	7.22
2013	5.31		2018	7.80

The current interest rate on new debt is 12%; Zeke's marginal tax rate is 40%; and its target capital structure is 35% debt and 65% equity.

1. Calculate Zeke's after-tax cost of debt. Round your answer to two decimal places.

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2. Calculate Zeke's cost of common equity. Calculate the cost of equity as r_s = D₁/P₀ + g. Do not round intermediate calculations. Round your answer to two decimal places.

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3. Find Zeke's WACC. Do not round intermediate calculations. Round your answer to two decimal places.

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