I am wondering if anyone can help me with problem solving.

Question 1 Capital Structure Theory The NEWT Company is located in a country where there are no taxes and there are perfect capital markets so that there are no bankruptcy costs. The corporation currently has $25 million in debt outstanding and the value of its equity is $75 million. The return on its equity is 15% and the return on its debt which is currently risk free is 8%. Suppose NEWT decides to issue $15 million additional debt and use it to repurchase $15 million of equity. The new debt is expected to be risk free after the issue. All the debt, both before and after the refinancing, consists of perpetuities. a) What is the total value of the firm after the refinancing? b) What would the return on the equity be after the refinancing? Question 2 National Foods is considering producing a new gelatin dessert. Tasty, of which management believes consumers, will buy 15,000 units each year for 3 years. The price of Tasty will be $2.00 per unit at t=0 and increases at 7%per year. New equipment to produce Tasty will cost $45,000 with no salvage value, while land will be bought at t=0 for $100,00 and sold at t=3 for $100,000. National expects production costs to be $12,000 each year. In addition, overheads and sales expenditures are expected to be $5,000 in the first year and then are expected to increase at sales expenditures are expected to $5,000 in the first year and then are expected to increase at 5% per year. The firm faces a 40% income tax rate and uses straight-line depreciation. The firm's stock price is $25 per share with 16 million shares outstanding. Its equity beta is 1.18. It also has 220 million debt outstanding. The only publicly traded bond it has is a two year, $10,000 bond with semi-annual coupons of 5,6% and a price of $9779. The risk-free rate is 3% and market-risk premium is 6%. All cash flows occur at year's end. The firm has other profit ongoing operations. a) Give a table of cash flows with one column for each year's end