Assume perfect capital markets. Mezzanine Corp., of which you are the CFO, is currently financed 60% by equity and 40% by debt. Your expected free cash flow is $15 million per year and can be assumed to remain constant forever. You estimate (based on your asset beta) that your assets should return approximately 15%. Your debt is risk-free and pays 7.5%. Ignore taxes. What is the expected return on equity of Mezzanine Corp.? The expected return on equity is Show all your work: Suppose that you decide to raise $5 million in debt and use the proceeds to pay a cash dividend to tockholders. The new debt is risk-free. What is the expected return on equity after you complet all these transactions? The new expected return on equity is Show all your work: raise an additional $10 million in debt (in addition to $5 million already in part 4B). The new debt is subordinate and therefore the new debtholders require a higher Suppose that you decide to rate of return equal to 1 1% Half of the proceeds ($5 million) will be used to repurchase equity; another half of the proceeds ($5 million) will be used to make an investment with risks similar to Mezzanine Corp.'s core assets and the NPV of $7.5 million. What is the return on equity now, after you complete all these transactions? The new expected return on equity is Show all your work