Terck, a leading pharmaceutical company, currently has a balance sheet that is as follows

Liability Assets

Long$-$term bonds $$1,000$ Fixed Assets $$1,700$

Equity $$1,000$ Current Assets $$300$

Total $$1,000$ Total $$1,000$

The firm$$s income statement looks as follows:

Revenues $$1,000$

Cost of Goods Sold $($COGS$)$ $$400$

Depreciation $$100$

EBIT $$500$

Long$-$term interest expense $$100$

EBT $$400$

Taxes $$200$

Net Income $$200$

The firm$$s bonds are all $20-$year bonds with a coupon rate of $10\%$ that are selling at $90\%$ of face value $($the yield to maturity on these bonds is $11\%).$ The stocks are selling at a P$/$E ratio of $9$ and have a beta of $1\mathrm{.}25.$ The risk$-$free rate is $6\%$

a$.$ What is the firm$$s current cost of equity?

b$.$ What is the firm$$s current after$-$tax cost of debt?

c$.$ What is the firm$$s current weighted average cost of capital? Assume that management of Terck, which is very conservative, is considering doing an equity$-$for$-$debt swap $($i$.$e$.,$ issuing $$200$ more of equity to retire $$200$ of debt$).$ This action is expected to lower the firm$$s interest rate by $1\%$

d$.$ What is the firm$$s new cost of equity?

e$.$ What is the firm$$s new cost of equity?

f$.$ What will the value of the firm be after the swap? $($zero growth rate$)$