Unlevering and then levering the required return on equity with Hamada, MM, and APV Somedebt, Inc , has a little debt (wd 20 ) with required return 8 It is considering restructuring to increase its percentage of debt to wd 50 Its beta is 0 8, the risk free rate is 6 , the market risk premium is 8 , and if it restructures, the required return on its debt will be 9 Somedebt's tax rate is 25 Using the Hamada equation, calculate Somedebt's unlevered required return and its required return on equity after the recapitalization Do not round intermediate calculations Round your answers to two decimal places Unlevered required return on equity Levered required return on equity Using the MM model with corporate taxes (Equation 17 16), calculate Somedebt's unlevered required return and its required return on equity after the recapitalization Hint you will have to use algebra to solve Equation 17 16 for r sU or use goal seek in Excel to find r sU Do not round intermediate calculations Round your answers to two decimal places Unlevered required return on equity Levered required return on equity Using the APV model, calculate Somedebt's unlevered required return and its required return on equity after the recapitalization Do not round intermediate calculations Round your answers to two decimal places Unlevered required return on equity Levered required return on equity

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Unlevering and then levering the required return on equity with Hamada, MM, and APV Somedebt, Inc., has a little debt (wd = 20%) with required

Unlevering and then levering the required return on equity with Hamada, MM, and APV Somedebt, Inc., has a little debt (wd = 20%) with required return 8%. It is considering restructuring to increase its percentage of debt to wd = 50%. Its beta is 0.8, the risk-free rate is 6%, the market risk premium is 8%, and if it restructures, the required return on its debt will be 9%. Somedebt's tax rate is 25%.

Using the Hamada equation, calculate Somedebt's unlevered required return and its required return on equity after the recapitalization. Do not round intermediate calculations. Round your answers to two decimal places.

Unlevered required return on equity: %

Levered required return on equity: %
Using the MM model with corporate taxes (Equation 17-16), calculate Somedebt's unlevered required return and its required return on equity after the recapitalization. Hint: you will have to use algebra to solve Equation 17-16 for r_sU or use goal seek in Excel to find r_sU. Do not round intermediate calculations. Round your answers to two decimal places.

Unlevered required return on equity: %

Levered required return on equity: %
Using the APV model, calculate Somedebt's unlevered required return and its required return on equity after the recapitalization. Do not round intermediate calculations. Round your answers to two decimal places.

Unlevered required return on equity: %

Levered required return on equity: %