Safirah is a company with no debt at all. The current cost of equity is 8% and the tax rate is 25%. It is now considering to raise debt and reach a capital structure with 50% debt and 50% equity. The cost of debt would be 4%. What is the cost of equity in this new capital structure scenario? What is the WACC? (Assuming the Mogliani-Miller Model with taxes). Do the calculations with 2 decimal points of a. 8% and 796 b. 7% and 7% c 11% and 7% d. None of the others e. 7% and 11% LOW is an all-equity firm which has 5,000 shares of stock outstanding worth $25,000. The current cost of equity is 14%. The CFO has decided to borrow $10,000 with an interest rate of 10% to buy back some shares. The firm expects to keep the new capital structure forever and it pays corporate income taxes at the rate of 30%. Which of the following statements is/are correct? a. The stock price is $5 and it will increase to $5.6 after the capital restructuring b. The WACC with the new capital structure is 14%. c The market value of the firm will not change after the capital restructuring