Layers Inc. currently has no debt. If they choose to borrow, they can do so at a rate of 6.4%. The firm's WACC is currently 9.5% and the tax rate is 35%. There are no costs of financial distress.

1. a)What is the company's cost of equity?
2. b)If the firm converts to =35% debt, what will its' cost of equity be?
3. c)If the firm converts to 50% debt, what will its' cost of equity be?
4. d)What is the company's WACC in part (c)?