1. A firm currently has total debt equal to $96 millions of dollars. They are considering changing that to a total amount of debt of $105. If they implement this change, what would be the change in the present value of the tax shield? The firm's tax rate is 30%, while the interest on debt is 3%.

2. A company has the following capital structure: D/E ratio = 0.25, Equity Beta = 1.14, Cost of Debt = 6%. The CEO proposes a new leverage, expressed by a target D/E ratio of 0.63. What would be the firm's new WACC?

Assume that the marginal tax rate is 40%, risk-free rate is 3.9%, market risk premium is 4.1%, and that debt is risk less.