Chiquitica Company currently does not use any debt at all(it is anall-equity firm). The firm has 4,000,000 shares selling for $50 per share. Its beta is0.8, and the currentrisk-free rate is2%. The expected market return for the coming year is12%. Chiquitica Company will sell$40,000,000 in corporate bonds with a$1,000par value. The bonds have a yield to maturity of 12%. When the bonds aresold, the beta of the company will increase to1.2.Chiquitica will use the entire proceeds of the bond sale to repurchase an equal dollar amount of its equity (buyback shares).The corporate tax rate is25%.

1) What is the WACC of Chiquitica Company before the bond sale? Enter using the %, for example if you obtain 0.20 then enter20%.

2) What is the market value of debt after the bond sale?

3) What is the market value of equity after the bond sale?

4) What is the weight for equity in the capital structure (the value E/V) - used to compute the WACC?Enter using the %, for example if you obtain 0.20 then enter20%

5) What is the cost of debt after the bond sale?Enter using the % and TWO decimal places, for example if you obtain 4.20% then enter4.20%

6) What is the cost of equity after the bond sale?Enter using the % and TWO decimal places, for example if you obtain 4.20% then enter4.20%

7) What is the adjusted WACC of Chiquitica Company after the bond sale?Enter using the % and TWO decimal places, for example if you obtain 4.20% then enter4.20%