5. The relationship between a firm's capital structure and othercompany attributes Under the assumptions of Modigliani and Maller's original paper, a firm's stock price wili be maximized at 100% - Signaling theory implies that a firm with extremely favorable prospects will be more likely to issue to fund atry new projects. When a firm sninounces a new stock offering, the price of its stock will usually When information is , managers have moe information about a firmis prospects than investors do. Blue Parn Brewing Company currently has no debt in its capital structure, but it is considering using some debt and reducing its outstanding equity. The firm's unievered beta is 1.15 , and its cost of equity is 11.55%. Because the firm has no debt in its capital structure, its weighted average cost of capital (WACC) also equals 11.55%. The risk-free rate of interest (rwp) is 3.5%, and the market risk premium (RPM) is 75%. Blue Ram's marginat tax rate is 25%. Qlue Ram is exarnining how different levels of debt will affect its costs of debt and equity, as well as its wACC. The firm has collected the firandal informabion that follows to analyze its weighted average cost of caplat (WhCC). Cocnplete the following table