1.Tesla plans to sell $1 Bn worth of stock and buy back $1bn of its bonds. This means that Tesla will receive $1Bn from the sale of new shares of stock, they will then buy back $1Bn dollars of bonds that are currently owned by investors. What is the impact of this change in capital structure on the 7 attributes listed in the table below?In each area of the table, circle one of:0 or ?with the following meaning:

-The attribute increases

-The attribute decreases

0 -There is no change in the attribute

?We do not have enough information to know the effect.

Under assumptions of: Modigliani-Miller I. Under assumptions of: Modigliani-Miller II

% Equity

0 or ? 0 or ?

Beta

0 or ? 0 or ?

Costof equity

0 or ? 0 or ?

Cost of debt

0 or ? 0 or ?

Value of Tax Shield

0 or ? 0 or ?

Costs of Financial Distress

0 or ? 0 or ?

WACC

0 or ? 0 or ?