The following tabulation gives earnings per share figures for the Foust Company during the preceding $10$ years. The firms common stock, $7\mathrm{.}8$ million shares outstanding is now selling for $$68$ per share, and the expected dividend at the end of the current year is $50\%$ of the $2003$ EPS. Because investors expected past trends to continue, g may be based on the earnings growth rate.

Year

EPS

Year

EPS

$1993$

$$3\mathrm{.}99$

$1998$

$5\mathrm{.}73$

$1994$

$4\mathrm{.}21$

$1999$

$6\mathrm{.}19$

$1995$

$4\mathrm{.}55$

$2000$

$6\mathrm{.}68$

$1996$

$4\mathrm{.}91$

$2001$

$7\mathrm{.}22$

$1997$

$5\mathrm{.}31$

$2002$

$7\mathrm{.}80$

The current interest rate of new debt is $11$ percent. The firms marginal tax rate is $40$ percent. Its capital structure, consider to be optimal, is as follows:

Debt $$156,000,000$

Common equity $104,000,000$

Total liabilities and equity $260,000,000$

Calculate Fousts after tax cost of new debt and common equity. Calculate the cost of equity ks$.$

Find Fousts WACC.