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Malkin Corp. has no debt but can borrow at 8.75 percent. The firm's WACC is currently 16 percent, and there is no corporate tax. Required:

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Malkin Corp. has no debt but can borrow at 8.75 percent. The firm's WACC is currently 16 percent, and there is no corporate tax. Required: (a) What is Malkin's cost of equity? (b) If the firm converts to 15 percent debt, what will its cost of equity be? % (c) If the firm converts to 50 percent debt, what will its cost of equity be? % (d) What is Malkin's WACC in part (b) and (c)? 15% : % 50% : %

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