A company is 48% financed by risk-free debt. The interest rate is 9%, the expected market risk premium is 7%, and

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A company is 48% financed by risk-free debt. The interest rate is 9%, the expected market risk premium is 7%, and

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A company is 48% financed by risk-free debt. The interest rate is 9%, the expected market risk premium is 7%, and
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the beta of the company’s common stock is .58.

a. What is the company cost of capital?(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Cost of capital            %

b. What is the after-tax WACC, assuming that the company pays tax at a 35% rate?(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

After-tax WACC            %

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