Company D is currently considering financing. If the financing is all equity, the cost of equity...

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Company D is currently considering financing. If the financing is all equity, the cost of equity is 10%. If a mix of debt and equity is used, debt of $20 million is issued at an interest rate of 6%. The company's EBIT is expected to be $6 million, and assume that all of MM's assumptions hold and that the company's tax rate is 40%. Please answer: • What is the enterprise value under each of the two capital structures. What is the required return to shareholders under the debt condition? • Determine the value of equity under the debt condition and prove that SL +D= V = $60 million. What is the weighted cost of capital of the firm under each of the two capital structures? Company D is currently considering financing. If the financing is all equity, the cost of equity is 10%. If a mix of debt and equity is used, debt of $20 million is issued at an interest rate of 6%. The company's EBIT is expected to be $6 million, and assume that all of MM's assumptions hold and that the company's tax rate is 40%. Please answer: • What is the enterprise value under each of the two capital structures. What is the required return to shareholders under the debt condition? • Determine the value of equity under the debt condition and prove that SL +D= V = $60 million. What is the weighted cost of capital of the firm under each of the two capital structures?