Montafiori Inc. has a target capital structure (in market values) of 60% debt and 40% equity. The firm's debt consists of 8 year, annually payable bonds with a coupon rate of 7%, and the bonds are actually traded at 106% of par value. Montafiori's stock currently sells for $100 per share and the last dividend paid (=D0) was $5.00. Investors expect the dividend to grow indefinitely at a constant rate of 10% per year. The company's tax rate is 40%. What is the cost of equity? What is the WACC?