Plymouth, Inc. wishes to change its present capital structure (D/E ratio) from (30%/70%) to (40%/60%). . Bu = 1.25 R = 3.0%, r= 10.00%, Tax rate = 25.0%, FCFO = $250, B2=2.0%, Current Debt = $500, Current ro = 6.50%, . Formulas: Bu = Bu + [1 +(1-T) (Wp + ws)] . Bu = Bu x [1 + (1 -T) x (Wp + ws)] . fs=+ Bex (rm-T) WACC = Wo X ra x(1 - T) + Ws X rs FCF, = FCF,x (1 + g) Vop= FCF + (WACC - g) E = Ws x Vop Price of Share P. = Equity + number of shares (n) Suggestions: Use 4 decimal points in your calculator. Enter answer for Q# 3 and Q #4 in decimal points. For example: To answer 15.57%, enter in Canvas as 0.1557 Questions (for Plymouth, Inc.): 10 Points 1. What is their current business risk (Bu)? (1 Point) At the new capital structure (40%/60%): 2. what will be their total risk (Bu)? (2 points) 3. what will be their required return on stock (ru)? (1 Point) Answer in decimal points 4. their new ro= 7.0%. What will be their cost of capital (WACC)? (2 Points) Answer in decimal points 5. what is their Value of Operations (Vop)? (2 points) 6. what is the value of Total Equity? (1 Point) 7. Assume the # of shares outstanding = 129. What is the intrinsic value or Price of each Po? (1 Point)