3. Wolfrum Technology (WT) has no debt. Its assets will be worth $489 million one year from now if the economy is strong, but only $294 million in one year if the economy is weak. Both events are equally likely. The market value today of its assets $298 is million. a. What is the expected return of WT stock without leverage? b. Suppose the risk-free interest rate is 5%. If WT borrows $127 million today at this rate and uses the proceeds to pay an immediate cash dividend, what will be the market value of its equity just after the dividend is paid, according to MM? c. What is the expected return of WT stock after the dividend is paid in part (b)? a. The unlevered expected return of WT stock is (Round to two decimal places.) b. The market value of WT's equity is $ million. (Round to the nearest integer.) c. The expected return of WT stock is \%. (Round to two decimal places.) 5. Suppose PayPal (PYPL) has no debt and an equity cost of capital of 9%. The average debt-to-value ratio for the credit services industry is 15%. What would its cost of equity be if it took on the average amount of debt for its industry at a cost of debt of 6.4% ? The cost of equity is \%. (Round to two decimal places.)