0107 Question 8 10 pts ABC Company is currently 100% equity and zero growth. The form has an annual EBIT of $1,600,000 its current cost of equity is 10% and the corporate tax rate is 25% tassume personal taxes are zero The firm's CFO has decided to recapitalize by issuing 58,000,000 in debt that carries an interest rate of 6% and repurchasing shares. Assuming that the assumptions of the Modigliani and Milier models hold, what is the expected WACC after the recapitalization? 8,71% 8.57% 9.27% 9.00X Question 9 10 pts Cartwright Communications is considering making a change to its capital structure to reduce its cost of capital and increase firm value. Right now Cartwright has a capital structure that consists of 10% debt and 90% equity, based on market values. The risk free rate is 2 and the market premium is 6%. Currently the company's cost of equity, which is based on the CAPM is 10% and its tax rate h 25%. What would be estimated cost of equity if it were to change its capital structure to 50% debt and 50% equity? DO MacBook Air