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

Net working capital. $770Debt. $700

Long-term assets2,880Equity2,950

Value of firm$3,650 $3,650

The debt is yielding 5.1%, and the cost of equity is 15.9%. The tax rate is 36%. 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. Do not round intermediate calculations. Round your answers to 1 decimal place.)

New Market-Value Balance Sheet

(figures in millions)

Net working capital$Debt$

Long-term assetsEquity

Value of firm$Total$