Here is Establishment Industries market-value balance sheet (figures in millions):

Net working capital	$	550	Debt	$	800
Long-term assets		2,150	Equity		1,900
Value of firm	$	2,700		$	2,700

The debt is yielding 7%, and the cost of equity is 14%. The tax rate is 35%. Investors expect this level of debt to be permanent.

a.	What is Establishments WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

WACC

%

b.	How would the market-value balance sheet change if Establishment retired all its debt? (Leave no cells blank - be certain to enter "0" wherever required.)

New Market-Value Balance Sheet (figures in millions)
Net working capital	$	Debt	$
Long-term assets		Equity
Value of firm	$	Total	$