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The follo ing table gi es Fou st Co pa ys earnings per share for the last 10 years. The co r on stock 8.6 milion shares outstanding is no (1/1/17) selling for?56 per share. The @ pected dividend at the end ofthe current year past trends to continue, g may be based on the historical earnings growth rate. (Note that 9 years of growth are relected in the 10 years of data.) 12/31/17) is 45% or the 2016 EPS Because i vestors expect sniected in the Year EPS Year EPS 2007 $3.90 008 4,212013 619 009 4.552014 6.68 010 4.912015 7.22 201 5.31 The current interest rate on new debt is 12%; rousts marginal tax rate is 40%; and its target capital structure is 35% debt and 65% equity. a. Calculate Fousts after-tax cost of debt, Round your answer to two decimal places 2012 $5.73 2016 7.80 Round your Calculate Fousts cost of common equity. Calculate the cost of equity as rs D/Po9-Round your answer to two decimal places. Do not round your intermediate calculations. b. Find Fousts WACC. Round your answer to two decimal places. Do not round your intermediate calculations.

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