1. 

Big Door Company has 8.7 million shares outstanding, which are currently trading for about $13 per share and have an equity beta of 1.2. Big Door has 19,900 outstanding bonds, with a 4% coupon rate, payable semi-annually and due in 10 years. The bonds are rated BBB. Currently the credit spread for BBB is 178 basis points over equivalent-maturity Government of Canada debt. The current yield on 10-year Canada bonds is 5%, compounded semi-annually. The risk-free interest rate is 2%, and the market risk premium is 6.6%. The company has a 35% tax rate. (Do not round intermediate calculations.) a. Calculate Big Door's WACC. (Round your answer to 2 decimal places.) WACC % b. Calculate Big Door's unlevered beta, using the following formula: Bu = Plevered + Pdebt X (1-T. )XD/E 1+(1-T. )XD/E ( Round your answer to 2 decimal places.) Unlevered beta c. If Big Door was 50% debt-financed, what would be its WACC? Assume that the beta of its debt is unchanged by the capital structure change. (Round your answer to 2 decimal places.) WACC %