You have collected the following information about a company:

Source of capital	Market value	Before-tax cost
Long-term debt	$200,000	8%
Preferred stock	$50,000	11%
Common equity	$560,000	15% for retained earnings 18% for new common stock
Total	$810,000

The company's total (federal plus state) marginal tax rate is 35%.

1. What is the weighted average cost of capital, if all common equity comes from retained earnings?

2. What is the weighted average cost of capital, if all common equity comes from newly issued stock?