10. Calculate UTK's unlevered required return on equity, rsU using the APV model. a. 8.0% b. 8.8% c. 9.7% d. 10.6% e. 11.7%

11. Suppose UTK's unlevered required return, rsU, is 9.1% (and not what you got in the previous problem). Now suppose that it recapitalizes to 60% debt, and its borrowing costs remain the same as in the previous problem. What will be its new required return on equity? Use the APV model (and not Hamada) for levering. a. 8.4% b. 9.2% c. 10.1% d. 11.1% e. 12.3%

UTK has the following information. Use this information for the next 2 problems. \begin{tabular}{lcll} current wd & 40% & rd & 7% \\ current ws & 60% & rf & 4% \\ current beta & 1.20 & RPM & 5% \\ Tax rate & 25% & & \end{tabular}