6. Instead, assume that the restructuring is completed and Martin is now 20% debt and 80% common equity. But the after tax cost of debt is 9% and the cost of common equity is 13.5%. What is Martins new weighted average cost of capital?

7. Now, should Martin make the capital structure change mentioned in the prior problem?

8. For a given profitable corporation (that pays taxes), what is the most expensive form of capital (between debt and common equity)? Why? Please state two reasons.

9. What is the difference between the weighted average cost of capital for a corporation and the marginal weight average cost of capital?

10. When weighting the components of capital to calculate the weighted average cost of capital, is it better to use book weights or market weights?