The following table gives Foust Company's earnings per share for the last 10 years. The common stock, 7.6 million shares outstanding, is now (1/1/19) selling for $74 per share. The expected dividend...

The following table gives Foust Company's earnings per share for the last 10 years. The common stock, 7.6 million shares outstanding, is now (1/1/19) selling for $74 per share. The expected dividend at the end of the current year (12/31/19) is 65% of the 2018 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.)

The current interest rate on new debt is 9%; Foust's marginal tax rate is 40%; and its target capital structure is 35% debt and 65% equity.

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



B) Calculate Foust's cost of common equity. Calculate the cost of equity as r_s
= D₁/P₀
+ g. Do not round intermediate calculations. Round your answer to two decimal places.
 %

C) Find Foust's WACC. Do not round intermediate calculations. Round your answer to two decimal places.
 %