Suppose you own a clothing boutique to pass the time in your retirement. This business currently has no debt, no short$-$term investments, $100,000$ shares outstanding, a beta of $1\mathrm{.}2,$ current$-$year free cash flows of $$100,000,$ and expected growth of $4\%$ per year.

a$.$ If the current business tax rate is $40\%,$ the risk$-$free rate is $4\%,$ and the market risk premium is $8\%,$ find the weighted average cost of capital $($WACC$),$ value of equity, and price per share for your firm.

You know from your MBA finance course that leverage can add value to your firm, so you consider changing your capital structure. The banker gives you interest rate quotes for the following capital structures:

$\backslash$table$[[w_d,12\mathrm{.}5\%,25\%,37\mathrm{.}5\%,50\%$