=+Director B believes that shareholders will demand a rate of return of 23.7 per cent;

Director C believes that shareholders will demand a rate of return of 17 per cent and Director D believes the equity rate of return will shift to 28 per cent. Assuming that the cost of borrowings before income taxes remains at 9 per cent, what will the WACC and the value of the firm be under each of the directors' estimates?

Relate the results in question 3b to the capital structure debate. In particular