A firm with no debt has a firm beta of 1.5. The risk-free rate is 3%. The market equity premium is 4%.

What is the firms cost of capital?

Assume that firms changes its debt/equity mix to 50% debt and 50% equity. Assume that this debt is risk-free. What is the beta of the equity portion if the entire firms beta is still 1.5?

According to CAPM, what expected rate of return does the firm have to offer to its creditors, i.e. debt holders?

According to the CAPM, what rate of return does the firm have to offer to its equity holders

Has the firms cost of capital changed after making the firm 50% debt, 50% equity?