5. Pennington Airlines currently has a beta of 1.30. The company's capital structure consists of $3 million of debt and $7 million of equity. The company is considering changing its capital structure. Under the proposed plan the company would increase its bonds by $2 million and use the proceeds to repurchase common stocks. (So, after the plan is completed, the company will have $5 million of debt and $5 million of equity.) The company's tax rate is 30%. The risk-free rate is 5% and the market risk premium (RM Rr) is 5%. What is the company's Rs? Compute the business risk premium and financial risk premium and confirm that Rs Re+ BRPM +FRPM