Normal Sin espa... Titulo 1 Titulo 2 Titulo Prrafo Estilos #1 1.1.1.2.1.3-14 71.8 1.9 110 111 112 113 114 115 116 117 QUESTION 3 1. Nakatomi Trading Corp. (NT) builds upscale homes in several New England cities. The firm is subject to the ups and downs of the construction industry and has a historical beta of 1.7. NTC has traditionally operated with a capital structure of approximately 20% debt and 80% equity. The owner, Griffin Ross, is interested in selling the business and has hired you to look at approaches to enhancing its market value. You think overall value might increase if the firm operated at its optimal capital structure, but you don't know what that optimal level is. A commercial banker has given you the following estimate of the rates that NIC could borrow depending on its level of leverage. % Debt 09% 10% 20% 30% 4096 506 6096 7096 80% 9096 ka 6.5% 700 8% 10% 1296 1596 1996 N/A N/A NTC is subject to a total effective tax rate of 40%. the risk-free rate is 6%, and the market is returning 10%-that is, the market risk premium (ku-kar) is %. Calculate NTC's cost of equity. kas well as its average cost of capital. k.(WACC), as functions of leverage where leverage measured by debt as a percent of total capital, varies from 0% to 70% in 10% increments. Round your answers and b. value to two decimal places. Do not round any other intermediate calculations. Enter numbers only without " (Hint: The NTC's beta is levered at a 20/80 debtlequity level. Begin by calculating the unlevered beta.) 9 70 80 90 De 09 2090 3090 6090 96 % 96 bt 696 19 NN 76 1090 1296 1896 9 A 109 100 6.3. 890 ki k. Use the results fork, to estimate NTC's optimal capital structure. Round the answers to the nearest whole percentage center numbers Only, without Tlie optimum capital structures in the neighborhood of debt sud w