If a firm is unlevered and has a cost of equity capital 12% what would the cost of equity be if the firms became levered at 2:1, and the expected cost of debt would be 8%. O a 14.67% Ob 16.0% OC. 20.0% Od 14.0% O. None of the above. The following data apply to the next three questions Delta Industries has 50 million outstanding shares, 5100 million in debt, $40 million in cash, and the following projected free cash flow to the firm (FCFF) for the next four years Year 0 1 2 3 4 Earnings and FCF Forecast (5 millions) 1 Sales Exam Support 433.0 4680 516.0 547.0 5743 2 Growth versus Prior Year 3 Cost of Goods Sold 8. 196 (3136) 10.396 (3457) 170.3 5096 (3843) 1544 6.0% (3665) 180 5 (109.4) (9.0) 1895 (936) (7.0) (1032) (75) 59.6 (238) (1149) (9.5) 65.2 4 Gross Profit 5 Selling, General, and Administrative 6 Depreciation 7 EBIT 8 Less Income Tax at 40% 9 Plus Depreciation 10 Less Capital Expenditures 11 Less: Increase in NWC 538 62.1 (248) 9.0 (215) 70 (261) 75 9.5 (77) (6.3) 25.3 (100) (86) 24.6 (9.9) (5.6) 30.8 (10.4) (4.9) 33.3 12 Free Cash Flow Suppose Delta's revenue and free cash flow are expected to grow at a 5% rate beyond year 4 If Delta's weighted average cost of capital (WACC) is 12% What is your estimate of the Terminal Value (TV) of Delta Industries based on this information? O a. $385.7 million O b. 5437.8 million Oc5456.3 million Od $499.5 million e. None of the above What is your estimate to the entire firm's value today based on this information? a S567 8 million b. $523 9 million Oc$478.9 million d S402.7 million e None of the above What is your estimate to the current share price of Delta's stock based on this information? a $5.98 b S6.85 c. $721 d S7 65 e None of the above