11 Taro Inc. is currently an all equity firm that has 120,000 shares of stock outstanding at a market price of $34.50 a share. The cost of equity is 11% and the tax rate is 35%. Taro is considering adding $1.6 million of debt at an interest rate of 7.5% to the capital structure. What is the value of equity for the levered firm? 10 Taro Inc. has EBIT of $160,000. The market value of debt is $300,000. The unlevered cost of equity is 12% and the cost of debt is 8%. The tax rate is 35%. What is the weighted average cost of capital? 9 Taro Inc. has a cost of equity of 23.2% and a pre-tax cost of debt of 10%. The required return on the assets is 18%. What is the firm's debt-equity ratio based on M&M II with no taxes