1G. Terclr, a leading pharmaceutical company, currentlyr has a balance sheet that is as follows: 0..-th W __ __ The rm 5 income statement looks as follows: $100 $400 The rm's bonds are all twentyyear bonds with a coupon rate of 1121?: that are selling at 95% of face value [the yield to maturity on these bonds is 11%}. The stocks are selling at a PE ratio of 9 and have a beta of 1.25. The risicfree rate is 6%. a. What is the firms current cost of equity? b. What is the firms current aftertax cost of debt? c. What is the firm= s current weighted average cost of capital? Assume that management of Terclt, winch is very conservative, is considering doing an equity fordebt swap (is, issuing $200 more of equity to retire $2011 of debt]. This action is expected to lower the rm's interest rate by 1%. d. What is the firm= s new cost of equity?r e. What is the new WACC