Firm XYZ has 10 million shares outstanding and a current share price of 50 per share. It also has long-term debt outstanding. This debt is risk-free, is three years away from maturity, has annual coupons with a coupon rate of 5%, and has a face value of 100 million. The first of the remaining coupon payments will be due in exactly one year. The riskless interest rates for all maturities are constant at 5%. Firm XYZ expects to generate a constant Free Cash Flow of 60 million per year. The corporate tax rate is 40% and the firm expects to keep the debt-equity ratio constant in the future. a) (5 marks) Based on this information estimate Firm XYZ's WACC. b) (5 marks) What is the firm's equity cost of capital? c) (5 marks) Explain why the equity cost of capital differs from the WACC. d) (5 marks) Find the present value of the interest rate tax shield. e) (5 marks) In order to increase the value of the firm (via interest tax shield), should the firm shift to 100% debt financing