Assume the following balance sheet information:

Book Value

Price per unit

# of units

Coupn Rate

Maturity

Bonds

$100,000,000

$1,000

100,000

8%

10 years

Common Stock

$275,000,000

$85

5,000,000

Retained Earnings

$400,000,000

Let the tax rate = 34%. Assume that the beta of the common stock is 1.2, the risk-free rate is 2%, and the market premium is 8%. Assume the firm would like to increase its debt so that its L, the percentage of debt financing, is 45%.

a)Determine the new ATWACOC

b)Determine the new Cost of Equity

c)Determine the new value of the firm if the cash flows may be represented as a perpetuity.

Please show work in excel.