Assuming X = 8

Bullish Corp (BullCo) is a highly leveraged firm with a WACC of 12 percent with a market value of equity at Rs.800 million. BullCo's cost of levered equity is 22 percent, cost of debt is 7 percent and a corporate tax rate of 41.5 x percent. Interest paid on debt is tax deductible. [20] a. Find BullCo's existing level of debt. [ [6] b. The advisory board of BullCo has decided to reduce the level of debt by 11.5 + x percent. What is BullCo's WACC after this restructuring? [9] C. An analyst at Bullco remarks that all zero NPV projects in the pipeline will have to be dropped after restructuring. Explain if this is necessarily true. [5]