Sutherland has $$100$ million of equity capital, which has a required rate of return of $10\%.$ The company tax rate is $40\%.$

Required

Calculate the weighted average cost of capital under each of the following $($independent$)$ alternatives, assuming that the size of the company does not change:

$($a$)$ No change

$($b$)$ Borrowing $$5$ million at $8\%$ interest and using it to pay a dividend of $$5$ million

$($c$)$ Borrowing $$50$ million at $8070$ interest and using it to pay a dividend of $$50$ million

$($d$)$ Borrowing $$98$ million at $8\%$ interest and using it to pay a dividend of $$98$ million