Answer Happy

430 points LIN 100001 Optimal Capital Structure with Hamade Roberts Creer and Associates (HEA) is considering change its capital structure REA currently the percent and cost of det litted to the right -Its current stock price and the outstanding are led to the right REAL Ogrowth firm and pay out of its earnings as dividends The firm's and tax rate ested to the right --The market risk premium and free rate are listed to the right HEA is considering i dette to a capitructure with the new weito de listed to the It will repurchase shares with the money that brow A will have to retire the old debt in order new destand the rate on the west will be the mounted on the w of current de Code HEA DEA REA 1 Marketwem free Foto www det WON - LA has a better What is REA's unlevered betal Use the market valet/(which is the same as w/w wiedevering points 6. What are now beta and cont of equity it has the new weight of debt on the he? (10) c. Calculate the new after tax cost of debt. (5 points) d. What is BA's WACC with the new weight of debt? 5 points) e. What is the total value of the time points) Please show work and were in mompletely to receive full credit 12
24 e. What is the total value of the firm? (5 points) 25 26 Please show work and answer questions completely to receive full credit. 27 20 29 30 31 a Unlevered beta 32 33 b new beta cost of equity 34 35 36 C after-tax cost of debt 37 38 d WACC 29 40 e Total value of firm Loka market capitalization 41 42