Um Campbell is founder and CEO of OpenStart, an innovative software company. The company is all equity financed, with 100 million shares outstanding. The shares are trading at a price of 51. Campbell currently owns 20 million shares. There are two possible states in one year. Either the new version of their software is a hit and the company will be worth $160 million, or it will be a disappointment, in which case the value of the company will drop to 575 million. The current risk free rate is 29. Campbell is considering taking the company private by repurchasing the rest of the outstanding equity by issuing debt due in one year. Assume the debt is zero-coupon and will pay its face value in one year portrollo (C)? 5. What is the yield on the risky debt in (d) that will be required to take the company private? 6. If the two outcomes are equally likely, what is OpenStart's current WACC (before the transaction)? 7. What is OpenStart's debt and equity cost of capital after the transaction? Show that the WACC is unchanged by the new leverage