1. Shi Import-Export's balance sheet shows $300 million in debt, $50 million in preferred stock, and $250 million in total common equity. Shi's tax rate is 35%, rd = 6%, rps = 7.5%, and rs = 10%. If Shi has a target capital structure of 30% debt, 5% preferred stock, and 65% common stock, what is its WACC? Round your answer to two decimal places.
2. Messman Manufacturing will issue common stock to the public for $50. The expected dividend and the growth in dividends are $2.25 per share and 3%, respectively. If the flotation cost is 9% of the issue's gross proceeds, what is the cost of external equity, re? Round your answer to two decimal places.