VanMannen Foundations, Inc. (VF) is a zero-growth company that currently has zero debt, and it has the data shown below.

EBIT =	$80,000
Growth =	0%
Orig cost of equity, rs =	10.0%
No. of shares =	10,000
Price per share =	$60.00
Tax rate =	25%

Refer to the data for VanMannen Foundations, Inc. (VF). Now the company is considering using some debt, moving to the market value capital structure indicated below. The money raised would be used to repurchase stock. It is estimated that the increase in risk resulting from the additional leverage would cause the required rate of return on equity to rise somewhat, as indicated below. If this plan were carried out, what would be VF's new WACC and its new value of operations?

New interest rate = rd =	6.00%
New cost of equity = rs =	10.75%
New Debt/Value = wd =	20%
New Equity/Value = ws =	80%

WACCValue

a. 9.80%$644,211

b. 9.50%$631,579

c. 10.10%$657,095

d. 10.40%$670,237

e. 10.70%$683,641