The simplified balance sheet for the Dutch manufacturer Rensselaer Felt (figures in thousands) is as follows: Short-term debt Accounts payable Current liabilities 77,500 63,900 141,400 Cash and marketable securities Accounts receivable Inventory Current assets Property, plant, and equipment Deferred taxes Other assets Total 3,400 121,900 126,900 252,200 213,900 46,900 87,100 600,100 Long-term debt 210,500 Shareholders' equity Total 248,200 600,100 The debt has an interest rate of 8.25% (short term) and 10.25% (long term). The expected rate of return on the company's shares is 17.25%. There are 7.65 million shares outstanding, and the shares are trading at 37. The tax rate is 25%. Assume the company issues 50 million in new equity and uses the proceeds to retire long-term debt. Also assume the company's borrowing rates are unchanged and the short-term debt is permanent. Use the three-step procedure. a. Calculate the cost of equity after the capital restructuring. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Cost of equity % b. Calculate the WACC after the capital restructuring. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Weighed-average cost of capital % The simplified balance sheet for the Dutch manufacturer Rensselaer Felt (figures in thousands) is as follows: Short-term debt Accounts payable Current liabilities 77,500 63,900 141,400 Cash and marketable securities Accounts receivable Inventory Current assets Property, plant, and equipment Deferred taxes Other assets Total 3,400 121,900 126,900 252,200 213,900 46,900 87,100 600,100 Long-term debt 210,500 Shareholders' equity Total 248,200 600,100 The debt has an interest rate of 8.25% (short term) and 10.25% (long term). The expected rate of return on the company's shares is 17.25%. There are 7.65 million shares outstanding, and the shares are trading at 37. The tax rate is 25%. Assume the company issues 50 million in new equity and uses the proceeds to retire long-term debt. Also assume the company's borrowing rates are unchanged and the short-term debt is permanent. Use the three-step procedure. a. Calculate the cost of equity after the capital restructuring. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Cost of equity % b. Calculate the WACC after the capital restructuring. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Weighed-average cost of capital %