Check My Wor eBook Optimal Capital Structure with Hamada Beckman Engineering and Associates (BEA) is considering a change in its capital structure. BE currently has $20 million in debt carrying a rate of 7%, and its stock price is $40 per share with 2 million shares outstanding. BEA is a zero-growth firm and pays out all of its earnings as didends. The firm's EBIT is $13 million, and it faces a 25% federal-plus-state tax rate. The market risk premium is 6%, and the risk-free rate is 4%. BEA is considering increasing its debt level to a capital structure with 40% debt, based on market values, and repurchasing shares with the extra money that it borrows. BA will have to retire the old debt in order to issue new debt, and the rate on the new debt will be 11%. BEA has a beta of 1.1. a. What is BEA's unlevered beta? Use market value D/S (which is the same as wa/ws) when unlevering. Do not round intermediate calculations. Round your answer to two decimal places. 2.51 3 b. What are BEA's new beta and cost of equity if it has 40% debt? Do not round intermediate calculations. Round your answers to two decimal places Beta: 1.06 Cost of equity: 12.32 % c. What is BEA'S WACC with 40% debt? Do not round intermediate calculations. Round your answer to two decimal places 10.90 $ What is the total value of the firm with 40% debt? Do not round intermediate calculations inter your answer in millions. For example, an answer of 51234 million should be entered as 1.234, not 1,234,000. Round your answer to three decimal places $ 17.002 3 million