Question 2: Washington paper company has estimated the costs of debt and equity capital (with bankruptcy and agency costs for various proportions of debt in its capital structure as follows. Determine the company's optimal capital structure. Tax rate 40% Deb Pretax Cost of After-tax Cost Cost of (B+E) L of debt Equity of debt Equity WACC 14.00% 1420% 7.00% 7.20% 14.60% 0.3 7.60% 15.40% 17.00% 8.20% 9.00% 20.00% 06 10.00% 26.00% Question 3: Comment on how leverage could affect shareholder wealth and the cost of capital? Question 4. Wolverine Corporation plans to pay $3 dividend per share on each of its 300,000 shares next year. Wolverine anticipates earnings of $6.25 per share over the years. If the company has a capital budgeting requiring an investment of 4 million over the year, and it desires to maintain its present debt to total assets (debt ratio) of0.40, how much external equity must Assume that Wolverine's capital structure includes only common equity and debt, and that debt and equity will be the only sources of funds to finance capital projects over the sh (US)