Please solve by hand and show all parts:

Two firms have expected annual net operating income of $10,000 in perpetuity with identical operating conditions and business risk. Both firms are no-growth firms that pay out all earnings in common dividends. One firm is considering issuing $30,000 of long-term debt at a 10% interest rate. Assume perfect capital markets, no taxes, and that all investors can borrow at 10%. If investors are capitalizing the unlevered firm's common dividends at 15% and the levered firm's common dividends at 16%: a. What is the WACC for the levered firm? b. What is the debt-to-equity ratio for the levered firm? c. If you hold 1% of the stock of the levered firm, how can you capture higher returns through the use of homemade leverage? d. What is the return-on-invested funds (ROI) using arbitrage? Take your answer out to at least five decimal places. e. In theory, how will investors respond once they realize the returns through arbitrage? Two firms have expected annual net operating income of $10,000 in perpetuity with identical operating conditions and business risk. Both firms are no-growth firms that pay out all earnings in common dividends. One firm is considering issuing $30,000 of long-term debt at a 10% interest rate. Assume perfect capital markets, no taxes, and that all investors can borrow at 10%. If investors are capitalizing the unlevered firm's common dividends at 15% and the levered firm's common dividends at 16%: a. What is the WACC for the levered firm? b. What is the debt-to-equity ratio for the levered firm? c. If you hold 1% of the stock of the levered firm, how can you capture higher returns through the use of homemade leverage? d. What is the return-on-invested funds (ROI) using arbitrage? Take your answer out to at least five decimal places. e. In theory, how will investors respond once they realize the returns through arbitrage