The simplified balance sheet for the Dutch manufacturer Rensselaer Felt (figures in thousands) is as follows: 3,500 Short-term debt Accounts payable Current liabilities 77,600 64,000 141,600 Cash and marketable securities Accounts receivable Inventory Current assets Property, plant, and equipment Deferred taxes Other assets Total 122,000 127,000 252,500 214,000 47,000 87,000 600,500 210,600 Long-term debt Shareholders' equity Total 248,300 600.500 The debt has an interest rate of 8.50% (short term) and 10.50% (long term). The expected rate of return on the company's shares is 17.50%. There are 7.66 million shares outstanding, and the shares are trading at 36. 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 %