WACC

The following table gives Foust Company's earnings per share for the last 10 years. The common stock, 8.6 million shares outstanding, is now (1/1/15) selling for $76 per share. The expected dividend at the end of the current year (12/31/15) is 65% of the 2014 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
2005	$3.90		2010	$5.73
2006	4.21		2011	6.19
2007	4.55		2012	6.68
2008	4.91		2013	7.22
2009	5.31		2014	7.80

The current interest rate on new debt is 8%; Foust's marginal tax rate is 40%; and its target capital structure is 35% debt and 65% equity.

Calculate Foust's after-tax cost of debt. Round your answer to two decimal places. _____%

Calculate Foust's cost of common equity. Calculate the cost of equity as rs = D1/P0 + g. Round your answer to two decimal places. _____%

Find Foust's WACC. Round your answer to two decimal places. _____ %