(a) Firm A's capital structure contains 30 percent debt and 70 percent equity. Firm B's capital structure contains 50 percent debt and 50 percent equity. Both firms pay 6 percent annual interest on their debt. The stock of Firm A has a beta of 1.0, and the stock of Firm B has a beta of 1.375. The risk-free rate of interest equals 4 percent, and the expected return on the market portfolio equals 12 percent. Required: (0) Calculate the WACC for each firm, assuming there are no taxes. (ii) Recalculate the WACC figures, assuming that the firms face a marginal tax rate of 34 percent. (iii) Explain how taking taxes into account in part (ii) changes your answer from part (i)