A$)$ A firm has a long run target of a $50-50$ mix of debt and equity capital. Under this long run capital structure, has a $6\%$ after$-$tax cost of debt and a $12\%$ after$-$tax cost of equity. Calculate the WACC.

B$)$The firm$$s board of directors is considering a long run capital change from a $50-50$ mix of debt and equity capital to $70\%$ debt. Using this new information and the part $($A$)$ after$-$tax cost of debt and equity, calculate the firm$$s new WACC and clearly state why it is lower than the WACC you calculated in part A