please solve question 1.4 asap , it will be really appreciated.

needed before 7pm

Question 1 [30] - Chapter 4 P11 Pg 11-13 Two companies, Wheels Ltd and Drive (Pty) Ltd, are entities within the transport industry. They are competitors specialising in providing car rental services. Both companies are exposed to the same business risk and both were all-equity- financed companies. In 2020, Wheels Ltd expanded its fleet and financed the expansion using debt finance Equity Foot Refers to The companies have the following capital structures: Drive (Pty) Wheels Ltd De do thot owercare Ltd adot) of we businese provid The wordeons "owner 3 000 000 3 500 000 unds obtained from the Book value of equity One word Market value of equity 4 000 000 8 000 000 trestne of > 2 000 000 be remove that our Book value of debt OF C provide and pe 3/4 Market value of debt 2 000 000 pouple od dock comjon retentie Issued shares 9 000 000 8 000 000 Current dividends 800 000 650 000 12% 14% Cost of equity capital (k.) . Additional information: The tax rate is 28%. The current market cost of debt is 13%. Curies to wrocie lud) The market value of one share in Wheels Ltd is R1.00. . met watu of o] (8) Required: 1.1. In your opinion, did the business risk profile of Wheels Ltd change when it acquired debt finance? Provide reasons for your answer. The reasons must very clearly specify the causes for the business risk changing or remaining unchanged. (4) More - Page 182 ATIB of 1.2 Use the information provided to calculate the weighted average cost of * O capital (WCC) for both companies. Whether torto) mit 1.3. Based on the results of 1.2, are the companies' capital structures aligned to the traditional or the Miller and Modigliani capital structure theory? Provide reasons for your answer. reg of company B 1.4. Basing their concerns on the Miller and Modigliani approach, Wheels Ltd's shareholders are of the opinion that they are not adequately compensated anymore for business risk compared with Drive's shareholders. They 9117-119 requested your assistance with the calculations needed to prove their concerns that they are not adequately compensated for holding shares in Wheels Ltd. Use a shareholder holding one share in Wheels Ltd and willing to purchase one Driver share as the basis for your calculations. Show all calculations and round off all calculations to the nearest rand. (14) 4 Question 1 [30] - Chapter 4 P11 Pg 11-13 Two companies, Wheels Ltd and Drive (Pty) Ltd, are entities within the transport industry. They are competitors specialising in providing car rental services. Both companies are exposed to the same business risk and both were all-equity- financed companies. In 2020, Wheels Ltd expanded its fleet and financed the expansion using debt finance Equity Foot Refers to The companies have the following capital structures: Drive (Pty) Wheels Ltd De do thot owercare Ltd adot) of we businese provid The wordeons "owner 3 000 000 3 500 000 unds obtained from the Book value of equity One word Market value of equity 4 000 000 8 000 000 trestne of > 2 000 000 be remove that our Book value of debt OF C provide and pe 3/4 Market value of debt 2 000 000 pouple od dock comjon retentie Issued shares 9 000 000 8 000 000 Current dividends 800 000 650 000 12% 14% Cost of equity capital (k.) . Additional information: The tax rate is 28%. The current market cost of debt is 13%. Curies to wrocie lud) The market value of one share in Wheels Ltd is R1.00. . met watu of o] (8) Required: 1.1. In your opinion, did the business risk profile of Wheels Ltd change when it acquired debt finance? Provide reasons for your answer. The reasons must very clearly specify the causes for the business risk changing or remaining unchanged. (4) More - Page 182 ATIB of 1.2 Use the information provided to calculate the weighted average cost of * O capital (WCC) for both companies. Whether torto) mit 1.3. Based on the results of 1.2, are the companies' capital structures aligned to the traditional or the Miller and Modigliani capital structure theory? Provide reasons for your answer. reg of company B 1.4. Basing their concerns on the Miller and Modigliani approach, Wheels Ltd's shareholders are of the opinion that they are not adequately compensated anymore for business risk compared with Drive's shareholders. They 9117-119 requested your assistance with the calculations needed to prove their concerns that they are not adequately compensated for holding shares in Wheels Ltd. Use a shareholder holding one share in Wheels Ltd and willing to purchase one Driver share as the basis for your calculations. Show all calculations and round off all calculations to the nearest rand. (14) 4