Intro Union Street Records is considering a new capital structure. The CFO has prepared a list of options: Option Debt-to-capital ratio Bond rating Interest rate 1 0 0.02 2 0.25 BBB 0.03 3 0.5 0.05 4 0.75 0.07 B The company currently has a debt-to-capital ratio of 0.75 (option 4) and an equity beta of 1.6. The tax rate is 34%. The risk-free rate is 2% and the expected equity market risk premium (MRP) is 9%. 18 - Attempt 1/3 for 10 pts. Part 1 What is the unlevered beta? 2+ decimals Submit Part 2 IBP Attempt 1/3 for 10 pts. Find the levered beta for each option. What is the levered beta for option 2 (debt-to-capital ratio of 0.25)? 2+ decimals Submit Part 3 Attempt 1/3 for 10 pts. Find the cost of equity for each option. What is the cost of equity for option 2 (debt-to-capital ratio of 0.25)? 3+ decimals Submit Part 4 Attempt 1/3 for 10 pts. Find the WACC for each option. What is the WACC for option 3 (debt-to-capital ratio of 0.5)? 3+ decimals Submit Part 5 | Attempt 1/3 for 10 pts. What is the WACC at the optimal capital structure (note: it is one of the four values found in part 4)? 3+ decimals Submit