Ashtyn Inc. is has the following characteristics

0. Ashtyn Inc. is contemplating investing in a new project with the same risk profile as its existing assets; its leverage would change to D/E = 0.6 (and remain at this level)

   1. What would Ashtyns new equity beta be?

   2. What would Ashtyns new cost of equity be?

   3. What would Ashtyns new WACC be?

   • - D/E = 0.4

   • - Beta of the stock: 1.4

   • - Cost of debt: 4%

     We also know:

   • - Risk free rate: 4%

   • - Market risk premium: 6%

   • - Corporate tax rate: 34%