JK Limited (JKL) is currently all-equity financed and has a value of $100 million. JKLs current expected return on equity is 15% and is taxed at a corporate rate of 30%. Suppose JKL changes its capital structure such that its new capital structure is comprised of 40% debt and 60% stock. The return on the newly issued debt is 7%. The risk-free rate is 2% and the market risk premium is 10%. a. What is JKLs new weighted average beta after the recapitalization?

b. What is JKLs new dollar value of equity after the recapitalization?