Use this information about TNT Corporation for the next three questions, 3133. Currently, TNT's balance sheet is as follows: Assets liabilities Assets $50 billion Debt $10 billion Common equity $40 billion Total assets $50 billion Total debt 84 common equity $50 billion The book value of the company (both debt and common equity) equals its market value (both debt and common equity). Furthermore, the company has determined the following information: ' The company estimates that its beforetax cost of debt is 7.5%. ' The company estimates that its leveled beta is 1.1. ' The r'iskefree rate is 5%. ' The market risk premium is 6%. ' The company's tax rate is 40 percent. in addition, TNT is considering a recapitalization. The proposed plan is to issue $10 billion worth of debt and to use the money to buy back $10 billion worth of common stock. As a result of this recapitalization, the firm's size will not change. 31. 32. What is its current cost of common equity (before the proposed recapitalization)? a. 5.92% b 1 0.08% C. 1 0.1 8% d. 9.88% e 1 i .60% What is its current unlevered equity beta (before the proposed recapitalization)? a. 1.0041 b. 0.6213 c. 0.8962 d. 1.2700 e. 0.9565