"Increasing financial leverage increases both the cost of debt (rdebt) and the cost of equity ( requity). So the overall cost of capital cannot stay constant." This problem is designed to show that the speaker is confused. Buggins Inc. is financed equally by debt and equity, each with a market value of $1 million. The cost of debt is 3%, and the cost of equity is 8%. The company now makes a further issue of debt and uses the proceeds to repurchase equity. This causes the cost of debt to rise to 4% and the cost of equity to rise to 10%. Assume the firm pays no taxes. a. After the debt issue, what percent of the firm is financed with debt? (Do not round intermediate calculations. Enter your answer as a whole percent.) b. After the debt issue, what percent of the firm is financed with equity? (Do not round intermediate calculations. Enter your answer as a whole percent.) c. What is the overall cost of capital? (Enter your answer as a percent rounded to 1 decimal place.)