Your firm is considering a leveraged stock repurchase (borrowing money to repurchase a large block of the firm's stock). However, it only wants to do this transaction if the new capital structure will lower the firm's weighted average cost of capital (WACC).

Current and Pro Forma data is given for the firm below. Perform all necessary computations, then make a recommendation on whether or not the firm should do the transaction.

	Current Data		Pro Forma Data (Assumes the firm does the transaction)
Debt/Capital (book)	20.0%		50.0%
Debt/Capital (market)	10.0%		40.0%
Tax rate	30.0%		30.0%
Pre-tax Cost of Debt	6.0%		7.5%
Cost of Equity	11.0%		13.0%
WACC
Do the transaction? (Yes or No)