A firm currently has a capital structure with 30 % debt. The debt, which is virtually riskless, pays an interest rate of 7%. The expected rate of return on the equity 12 %. What is the Weighted-Average Cost of Capital if the firm pays no taxes? Enter your answer as a percentage rounded to two decimal places. Do not include the percentage sign in your answer. WACC = 10.5 Correct response: 10.5+0.02 What would happen to the expected rate of return on equity if the firm changed its capital structure to 40 % debt? Assume the firm pays no taxes, the cost of debt does not change, and that the initial WACC is 10.50 %. Enter your anwer as a percentage rounded to two decimal places. Do not include the percentage sign as part of your answer. Return on equity = Number Section Attempt 1 of 1 Verify The common stock and debt of Windows Phone Corp. are valued at $48 million and $21 million, respectively. Investors currently require a 10% return on the common stock and an 7% return on the debt. There are no taxes. Calculate the weighted average cost of capital. Enter your answer as a percentage. Do not include the percentage sign in your answers. Enter your answer rounded to 2 DECIMAL PLACES. WACC = 9.09 Correct response: 9.99:0.01 Click "Verify" to proceed to the next part of the question. If Windows Phone Corp. issues an additional $14 million of debt and uses this money to retire common stock, what will be the expected return on the stock? Assume that the change in capital structure does not affect the risk of the debt, and recall that the WACC under the initial capital structure is 9.09%. Enter your answer as a percentage. Do not include the percentage sign in your answer. Enter your answer rounded to 2 DECIMAL PLACES. TE = Number Click "Verify" to proceed to the next part of the question. Section Attempt 1 of 1 Verify