: Tucson Inc. will have after-tax unlevered cash flow in the coming year of $8 million, and this cash flow is expected to grow at a rate of 3.5% per year thereafter. Flagstaff has an equity cost of capital of 13%, a debt cost of capital of 5%, and the firm is in the 20% corporate tax bracket. Currently Tucson Inc. has D/A=0.5. The market rate of return is 11% and the risk-free rate is 3%. Use WACC method: Find the WACC for Tucson Inc. at the current leverage [ Select ] ["11%", "13%", "9.5%", "8.5%"] Find the value of Tucson Inc. at the current leverage [ Select ] ["94", "62", "84", "160"] Find the current beta of debt for Tucson Inc. [ Select ] ["0.25", "0.3", "0.2", "0.1"] Find the current beta of equity for Tucson Inc. [ Select ] ["1.25", "1.0", "0.9", "0.75"] What would be the cost of equity if Tucson Inc. were to change to an all-equity firm (D/A=0) [ Select ] ["7%", "8.5%", "8%", "9%"] Find the Value of Tucson Inc. if it were to change to an all-equity firm [ Select ] ["167.3", "145.5", "88.9", "175.4"] . Explain why value increases or decreases relative to the previous case

Question 5 35 pts Tucson Inc. will have after-tax unlevered cash flow in the coming year of $8 million, and this cash flow is expected to grow at a rate of 3.5% per year thereafter. Flagstaff has an equity cost of capital of 13%, a debt cost of capital of 5%, and the firm is in the 20% corporate tax bracket. Currently Tucson Inc. has D/A=0.5. The market rate of return is 11% and the risk-free rate is 3%. Use WACC method: 1. Find the WACC for Tucson Inc. at the current leverage [Select]