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A company has the following capital structure: D/E ratio = 0.37, Equity Beta = 1.03, Cost of Debt = 6%. The CEO proposes a new

A company has the following capital structure: D/E ratio = 0.37, Equity Beta = 1.03, Cost of Debt = 6%.

The CEO proposes a new leverage, expressed by a target D/E ratio of 0.64. What would be the firm's new WACC?

Assume that the marginal tax rate is 40%, risk-free rate is 3.7%, market risk premium is 4.1%, and that debt is risk less.

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