WACC$=8\mathrm{.}77$

correct response: $8\mathrm{.}77+-0\mathrm{.}02$

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Suppose Windows Phone Corp. had an additional $$12$ million of debt and had $$12$ million less of common stock, what would be the expected return on the stock? Assume that the change in capital structure would not affect the risk of the debt, and recall that the WACC under the initial capital structure is $8\mathrm{.}77\%.$ Enter your answer as a percentage. Do not include the percentage sign in your answer. Enter your answer rounded to $2$ DECIMAL PLACES.

$r_E=$

Correct response: $13\mathrm{.}54+-0\mathrm{.}02$

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Suppose you would like to be able to invest in the firm if they had the capital structure above with a $13\mathrm{.}54\%$ return on the common stock and a WACC of $8\mathrm{.}77\%.$ If you have $$2,000$ to invest, how much should you invest in the stock and bonds of the original firm $($which have returns of $11\%$ and $4\%,$ respectively$)$ to obtain the same return as an investment in the stock of the firm if it had $$33$ million of debt and $$33$ million of equity? Enter your answers rounded to $2$ DECIMAL PLACES.

Amount into equity $=$

Amount into debt $=$