3. Given the results of the model from questions (1) and (2), assume Mr. Lucier and the Life Tech board raised their target debt to equity ratio from 30% to 60% to reduce their weighted average cost of capital. Such a reduction would make projects that would not have been undertaken at a higher cost of capital attractive. Recalculate the firm’s weighted average cost of capital assuming that none of the assumptions about the cost of capital made in the base case have changed, with the exception of the levered beta. (Hint: The levered beta needs to be unlevered and then relevered to reflect the new debt to equity ratio). Without undoing the assumption changes made in questions (1) and (2), use your new estimate of the firm’s WACC during the planning period to calculate Life Tech’s enterprise and equity values given on the Valuation Worksheet. Explain why the change in the debt to equity ratio affected firm value.