May you explain the theories and formulas used, thanks for the help! thanks

A large unquoted company requires finance for expansion. Explain the advantages and disadvantages of raising finance by: (i) (ii) issuing shares an unsecured bank loan BEN Electronics is considering buying a new machine and using it to produce a new type of silicon chip that the company's engineers have designed. The financial estimates supplied by the firm's technical and marketing staff are as follows. One number is given for figures that are certain. Where there is risk, the analysts have been asked for an expected value and a feasible range of values. The probability that the final outcome will be below the lower limit, or that it will be above the higher limit is 5%. The new machine will cost 600,000 (certain), and it has a design capacity of one million chips a year. The proportion of these chips that will be of saleable quality is estimated at 80% (range 68% to 92%). The fixed costs of operation will be 100,000 per year (certain) and the variable costs per unit sold will be 10p per chip (certain). Initially chips will be sold at what the market will bear. This is expected to be 50p (range 45p to 55p). However, competitors will have learned how to make the chips at the end of the 4th year (range 3 yrs to 5 yrs) and when this happens the price will fall to 30p. BENs cost of capital for this project is 15% p.a. The machine, and the chips it produces, will become obsolete after 8 years of production. (i) (ii) Calculate the expected value for the NPV. Perform a sensitivity analysis on this project. Which type of risk (% of saleable chips, number of years before competitive entry and initial price) has the biggest influence on the net present value of the project? How might the business use this information? (iii) NB The variable costs are only incurred on chips that are of saleable quality. The total market value of the common stock of Knorr is 6 million, and the total value of its debt (AAA-rated) is 4 million. The treasurer estimates that the beta of the stock is currently 1.5 and the expected risk premium of the market is 9 percent. The gilts rate is 8 percent. Assume that Knorr's debt is risk-free. a) What is the required return on Knorr's stock? b) What is the beta of the company's existing portfolio of assets? c) Estimate the company's asset or unlevered cost of capital ru. Hose plc presently has a capital structure which is 30% debt and 70% equity. The cost of debt (i.e. borrowing) before taxes is 9 per cent and the cost of equity is 15 per cent. The firm's future cash flows, after tax but before interest, are expected to be perpetuity of 750,000. The tax rate is 30%. a) Calculate the WACC and the value of the firm. b) The directors are considering the partial replacement of equity finance with borrowings so that borrowings make up 60 percent of the total capital. Director A believes that the cost of equity will remain constant at 15 percent; Director B believes that shareholders will demand a rate of return of 23.7 per cent; Director C believes that shareholders will demand a rate of return of 17 per cent and Director D believes the equity rate of return will shift to 28 per cent. Assuming that the cost of borrowing before income taxes remains at 9 per cent, what will be the WACC and the value of the firm under each of the directors' estimates? c) Relate the results in question b) to the capital structure debate