Hubbard pet food is financed 30% by common stock and 70% by bonds. The expected return on the common stock is 11.8% and the rate of interest on the bonds is 6.6% assume that the bonds are default free and that there are no taxes. Now assume that Hubbards issues more debt and uses the proceeds to retire equity the new financing mix is 24% equity and 76% debt. Assume the debt is still default free A. Given the initial capital structure calculate the expected return on equity B. Given the revised capital structure calculate the expected rate of return on equity