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a A-Z Capital Structure Analysis Pettit Printing Company has a total market value of $100 million, consisting of 1 million shares selling for $50 per

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a A-Z Capital Structure Analysis Pettit Printing Company has a total market value of $100 million, consisting of 1 million shares selling for $50 per share and $50 million of 10% perpetual bonds now selling at par. The company's EBIT is $11.15 million, and its tax rate is 20%. Pettit can change its capital structure by either increasing its debt to 55% (based on market values) or decreasing it to 45%. If it decides to increase its use of leverage, it must call its old bonds and issue new ones with a 12% coupon. If it decides to decrease its leverage, it will call its old bonds and replace them with new 7 coupon bonds. The company will sell or repurchase stock at the new equilibrium price to complete the capital structure change. The firm pays out all earnings as dividends; hence, its stock is a zero growth stock. Its current cost of equity, s, is 14%. If it increases leverages will be 16%. If it decreases leverage, re will be 13%. Present situation (50% debt): What is the firm's WACC? Do not round intermediate calculations. Round your answer to three decimal places. % What is the total corporate value? Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round Intermediate calculations. Round your answer to three decimal places. million 55% debt: What is the firm's WACC? Do not round Intermediate calculations. Round your answer to two decimal places $ % What is the total corporate value? Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round Intermediate calculations. Round your answer to three decimal places 5 million 45% debt: What is the firm's WACC? Do not round intermediate calculations. Round your answer to two decimal places What is the total corporate value? Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round intermediate calculations, Round your answer to three decimal places. million

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