Currently, Meyers Manufacturing Enterprises (MME) has a capital structure consisting of 35% debt and 65% equity. MME's debt currently has a 6.5% yield to maturity. The risk-free rate (rRF) is 4.5%, and the market risk premium (rM rRF) is 5.5%. Using the CAPM, MME estimates that its cost of equity is currently 11.2%. The company has a 25% tax rate. Based on the information above, answer the following 6 questions.

1. What is MME's current WACC (in %)? Do not round intermediate calculations. Round your answer to two decimal places. Enter numbers ONLY. Do not enter the percentage sign (%). For example, if your calculated result is 12.34%, just enter 12.34 Flag question:

pts 2. What is the current beta on MME's common stock? Do not round intermediate calculations. Round your answer to four decimal places. Flag question:

pts 3. What would MME's beta be if the company had no debt in its capital structure? That is, what is MME's unlevered beta, bU? (Hint: use the Hamada equation) Do not round intermediate calculations. Round your answer to four decimal places. Flag question: Question 8

MME's financial staff is considering increasing the company's leverage ratio by changing its capital structure to 45% debt and 55% equity. If the company went ahead with the proposed change, the yield to maturity on the company's bonds would rise to 7.0%. The proposed change will have no effect on the company's tax rate. 4. What would be the company's new cost of equity (in %) if it adopted the proposed change in capital structure? (Hint: use the Hamada equation to find levered beta first; then use CAPM to find the new required return of equity) Do not round intermediate calculations. Round your answer to two decimal places. Enter numbers ONLY. Do not enter the percentage sign (%). For example, if your calculated result is 12.34%, just enter 12.34

5. What would be the company's new WACC (in %) if it adopted the proposed change in capital structure? Do not round intermediate calculations. Round your answer to two decimal places. Enter numbers ONLY. Do not enter the percentage sign (%). For example, if your calculated result is 12.34%, just enter 12.34