trades ft the risk-free interest rate of 3 %' ole e ote Conte Ora 29.11. A firm has an expected rate of return of 6%. Its debt 7%, what is the firm's debt ratio? 2. The firm refinances itself. It repurchases one-third of its stock with debt that it issues. Assume that this debt is still risk-free. What is its new debt ratio? 3. What expected rate of return does the firm have to offer to its new creditors? 4. Has the firm's weighted average cost of changed? 5. What expected rate of return does the firm have to offer to its new levered equity holders? elck ~ 17. I Composate Fir July Tvin trades ft the risk-free interest rate of 3 %' ole e ote Conte Ora 29.11. A firm has an expected rate of return of 6%. Its debt 7%, what is the firm's debt ratio? 2. The firm refinances itself. It repurchases one-third of its stock with debt that it issues. Assume that this debt is still risk-free. What is its new debt ratio? 3. What expected rate of return does the firm have to offer to its new creditors? 4. Has the firm's weighted average cost of changed? 5. What expected rate of return does the firm have to offer to its new levered equity holders? elck ~ 17. I Composate Fir July Tvin