Question 1) Ross Corporation is considering a change in current capital structure. Currently the company has $20 million in debt which pays 8% interest rate and company's stock is selling at $40 PER share (2 million shares outstanding). The company pays all of its earning as dividend (zero growth). The company pays 40% tax rate current EBIT is $14933 million. Market risk premium is 4% and risk free rate is 6%. Company will repurchase the shares at market price by issuing the additional debt and increasing debt ratio up to 40%. Company must retire the old debt and issue new debt on higher rate 9%. Company's current beta is 1.0. Required: a) What is Ross Company's unlevered Beta? (According to market values) b) What is Ross Company's new beta and cost of equity, if debt ratio changes up to 40%? c) What is Ross Company's WACC and value of firm at 40% debt ratio? (Marks 02) Ouestion 2) firm's