The equity and debt of A ltd are valued at $50 million and $30 million, respectively. Investors currently require a 16 percent return on their investment and the interest on debt is 8%. There is no tax.

A. Calculate the Weighted Average Cost of Capital for A Ltd. Show calculations.

B. If A Ltd decides to issue an additional $20 million of shares and uses this money to retire debt, what is the impact of this restructure on A Ltds firm value and the investors share value. Explain your answer.