Problem One Kellers Group has a Capital Structure of 20% Debt and 80% Equity, and has provided you with the following information YTM (rd before tax) 88 Risk Free Rate Market Risk Premium Beta leveraged BL(current) 1.25 WACC 10.06 Tax Rate EPS(current) $45 40 1. What is the current cost of equity rs: 10.25% 11.75% 12 50% 13.35% None of the above 2. What is the Company's stock price at the current debt ratio 20%? $22.5 $32 $36 $45 None of the above 3. What would Beta be if the Company had no debt in its Capital Structure, that's what is approximate Bu? 1.080 1.087 3.125 2.315 O None of the above 4. If the Company changes its capital structure to 50% debt and 50 % equity. YTM (rd) would rise to 9% keeping the same Tax rate. In this case. what would be the Company's new Beta, that is what is the approximate BL new? 1.5204 1.2505 1.1584 1.7392 None of the above 5. What would be the Company's new cost of equity.rs(new) at debt ratio 50%? 13.142 12.145 14.124% 15.435 None of the above 6. The WACC of the company at debt ratio 50%.compared to current WACC will approximately: Increase by 0.5% Decrease by 0.5 Increase by 30% o Decrease by 15% None of the above 7. If the Company changes its capital structure to 50% debt and 50 % equity, its EPS would rise to $5. In this case, what would be the Company's new stock price? $50.00 $32.39 $30.45 $23.00 None of the above