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Please answer 3 and 4. Very desperate!! Problem 1 - Use of Leverage in Recapitalization Bronco Corp (Bronco) currently has no debt in its capital

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Please answer 3 and 4. Very desperate!!

Problem 1 - Use of Leverage in Recapitalization Bronco Corp (Bronco) currently has no debt in its capital structure. It is considering borrowing $45 million by issuing 10 year maturity bonds at an 8% coupon and using the proceeds to repurchase 25% of its outstanding stock. Please complete the following table for Bronco and answer the questions below while showing your work. Assume, as the Miller-Modigliani Theorem I does, that there are no corporate taxes. Bronco Corp. UNLEVERED LEVERED EBIT $25 million $25 million #Sh. C/S out (Float") 20 million Pricecs $9/sh. $9/sh. Total Debt (Bonds) kDebt Annual Interest Payment Market Capitalization EPS |kes WACC 3. Please calculate the required return on common stock (kcs) before and after the recapitalization. 4. What is the WACC before and after the recapitalization

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