35. Vang Enterprises, which is debt-free and finances only with equity from retained earnings, is considering 7 equal-sized capital budgeting projects. Its CFO hired you to assist in deciding whether none, some, or all of the projects should be accepted. You have the following information: rrf=4.50% RPM=5,50%, and b=0.89. The company adds or subtracts a specified percentage to the corporate WACC when it evaluates projects that have above- or below-average risk. Data on the 7 projects are shown below. If these are the only projects under consideration, how large should the capital budget be? -NMON Expected return 7.60% 9.15% 10.10% 10.40% 10.80% 10.90% 13.00% Project Risk Risk factor 1 Very low -2.00% 2 Low -1.00% 3 Average 0.00% 1.00% Very high 2.00% 6 Very high 2.00% 7 Very high 2.00% a. S150 million b. $175 million c. $75 million d. S100 million c. $125 million Cost (millions) S25 $25 S25 S25 $25 $25 S2S High 36. Based on the information below, what is the firm's optimal capital structure? a. Debt = 40%: Equity=60%, EPS = $2.95: Stock price = $26.50. b. Debt = 50%, Equity = 50%, EPS = $3,05, Stock price = $28.90 c. Debt=60%; Equity=40%EPS = $3.18, Stock price = $31.20. d. Debt = 80%; Equity = 20%, EPS = $3.42; Stock price $30.40 e Debt = 70%; Equity = 30%, EPS = $3.31: Stock price = $30,00