Use the following information to answer the questions

Case I: Capital structure (no corporate tax)	Case II: Capital structure (corporate tax)
Debt-to-firm value (D/V): 0% Cost of equity: 10% Cost of debt: 6%	Debt: $ 0 million EBIT: $40 million Tax rate: 50% Unlevered cost of capital: 10%

In Case I, when the debt-to-firm value (D/V) increases from 0% to 50%,

Figure out the new cost of equity. (25points).

Figure out the old WACC with zero debt. Figure out the new WACC with debt of 50%. (25points).