Consider that you are the Managing Director of Durham Consulting Group. You have decided to change the composition of your firm$$s capital structure, and are evaluating how much your company can afford to borrow.

There are currently $8$ million shares outstanding in your firm, and the market price per share is $25$ per share. The firm also holds debt at $150$ million, currently outstanding. You are rated presently as BBB$.$

The stock of the firm has a beta of $1\mathrm{.}5.$ The risk$-$free rate is $2\mathrm{.}5\%.$ The firm faces a marginal tax rate of $30\%.$ The return on the market is equal to $9\mathrm{.}6\%.$

You estimate that if you borrow $100$million more, the rating of your company will change to B$.$ The current BBB rate is $8\%$ while the B rate is $12\%.$

a$.$ What is the current Debt$-$to$-$Equity ratio of the firm?

b$.$ What is the Debt$-$to$-$Capital ratio of the firm?

c$.$ What is the firm$$s Cost of Equity before additional borrowing?

d$.$ What is the firm$$s WACC before the additional borrowing?