EXERCISES Whispering Pines, inc. is all equity financed. The expected rate of return on the company's shares is 12%. - What is the opportunity cost for an average risk Whispering Pines investment? - Suppose the company issues debt, repurchases shares, and moves to a 30% debt to value ratio. What will the company's WACC be at the new capital structure? The borrowing rate is ry=.10, and the tax shield per dollar of interest is T=.35. 238 238