all information needed are provided

Question #3: Westbrook Water Co. is an all equity company with ENT of 3000.000 per year which will continue forever as the company pays out all earings in the form of dividends no growth You must determine the optimal capital structure for this company, You have been provided with the following additional information: Tbills are currently vieding 1.5 the expected return on the market is 8.5, the company's tax rates and costs of financial distress apply. Assume the market value of debt is equal to its book value. Value of Debt Cost of Debt Rd Beta PV of Financial Distress Costs 145 $2,500,000 $4.000.000 a) c) d] e) 1) What is the value and WACC of this all equity firm marks What would be the value of the company if it issues $2.5 million in debt? 14 martes) What would the PV of financial distress costs be if the firm issues $2.5million in debt? 12 marks] What would be the value of the company if it issues 54 million in debt? 12 marks What would be the company's Beta if it issues S4 million in debt? 15 marks What is the optimal capital structure 0, $2.500.000, or $4,000,000 12 marts Question #3: Westbrook Water Co. is an all equity company with ENT of 3000.000 per year which will continue forever as the company pays out all earings in the form of dividends no growth You must determine the optimal capital structure for this company, You have been provided with the following additional information: Tbills are currently vieding 1.5 the expected return on the market is 8.5, the company's tax rates and costs of financial distress apply. Assume the market value of debt is equal to its book value. Value of Debt Cost of Debt Rd Beta PV of Financial Distress Costs 145 $2,500,000 $4.000.000 a) c) d] e) 1) What is the value and WACC of this all equity firm marks What would be the value of the company if it issues $2.5 million in debt? 14 martes) What would the PV of financial distress costs be if the firm issues $2.5million in debt? 12 marks] What would be the value of the company if it issues 54 million in debt? 12 marks What would be the company's Beta if it issues S4 million in debt? 15 marks What is the optimal capital structure 0, $2.500.000, or $4,000,000 12 marts