$3.$ The following is known about a company and a financial market:

company: Be $=1\mathrm{.}2,$ ra $=0\mathrm{.}0,6,$ D$/$E $=1,$ tax $=0\mathrm{.}4$

financial market: rf $=0\mathrm{.}04,$ rm $=0\mathrm{.}1$

$($a$)$ Assuming that the Modigliani$-$Miller assumptions hold, i$.$e$.$ that debt is pr mined and permanent, calculate re$,$ ra$,$ Ba$,$ Ba and WACC.

$($b$)$ Assuming that debt is rebalanced, calculate re$,$ ra$,$ Ba$,$ Ba and WACC.

$($c$)$ Explain the differences between part $($a$)$ and part $($b$).$