The Winter Wear Company has expected earnings before interest and taxes of $2,100, an unlevered cost of capital of 14% and a tax rate of 34%. The company also has $2,800 of debt that carries a 7% coupon. The debt is selling at par value. What is the value of this firm? Select one: O a. Debt ratios in most countries are considerably less than 100%. O b. $10,852 O c. $9,900 O d. $11,748 O e. Debt levels across industries vary widely. Using the original Modigliani and Miller assumptions if a firm's cost of capital is 12% when it is all equity financed and it's cost of debt is 8%, the cost of equity will be % when the firm is financed with equal amount of debt and equity. Select one: a. cannot be determined with the information given O b. 16% O c. 24% O d. 12% Consider the Modigliani and Miller world of corporate taxes. An unlevered (all-equity) firm value is $400 million. By adding debt, the annual interest expense is $150 million, the corporate tax rate is 20%, and the discount rate on the tax shield is 8%. What is the value of the firm after adding debt? Select one: O a. $875 million O b. $1,000 million O c. $400 million d. $775 million The Tip-Top Paving Co. has a beta of 1.11, a cost of debt of 11% and a debt to value ratio of .6. The current risk free rate is 9% and the market rate of return is 16.18%. What is the company's cost of equity capital? Select one: O a. 16.97% b. 8.96% O c. 17.96% O d. 7.97% TransPacific Inc. is an import-export company specializing in products from Asia and the West Coast. It can borrow in the debt market at 9%. Its cost of equity with 40% DN ratio is 13%. Its corporate tax rate is 20%. If the M&M world of taxes holds true, what is the WACC for TransPacific Inc. with a 40% DN financing? Select one: O a. 8.00% O b. 7.80% O c. 9.44% O d. 10.68% Your firm has a debt-equity ratio of 60. Your cost of equity is 11% and your after-tax cost of debt is 7%. What will your cost of equity be if the target capital structure becomes a 50/50 mix of debt and equity? Select one: O a. 10.50% O b. 9.50% O c. 11.00% O d. 12.00%