1. Compute the market Debt to Equity ratio.

2. Compute the cost of levered equity based on market Debt to Equity ratio.

3. Compute the current weighted average cost of capital (WACC).

4. Repeat steps 2 and 3 for Scenario i) issue 1 billion in debt to repurchase stock, and Scenario ii) issue 1 billion in stock to repurchase debt. Briefly comment the results.

(Please make havard style references as well, thank you so much!)

You are a new recruit in the finance division of LargeCompany Plc. Your finance director has asked you to review the company's capital structure when the amount of debt is changed. She has provided you following information from last year annual report Short Term Debt/Current Portion of Long Term Debt Long Term Debt Total Equit Shares Outstandin in '000 1,700,000 9,700,000 18,000,000 1,700,000 Further, you collected following market information from the New Financial Times. Stock Price (per share Current Yield to Mat E 27 0.90% on outstanding Bond Cost of unlevered equity is 10 %