Assume that firm XYZ has a debt/equity ratio of 1/3. The firm has the following capital structure: Coupon Rate or Security Market Value Cost of Capital Debt $100 million 12% Equity $300 million 24%

The 12% cost of capital for Debt is the yield of the debt. Assume further that the firm's unlevered cash flows may be represented as a (constant) perpetuity. Assume that the firm wishes to increase the debt/equity ratio to 1.2 and assume no change in the probability of default. Determine, assuming a corporate tax rate of 34%. a) Find the new ATWACOC b) Find the New Cost of Equity c) Find the new Value of the firm d) Find the new levels of debt and equity e) Find the expected price per share, assuming that there are currently 5 million shares outstanding.

Please show all math.

Thank you