Algo Inc. is considering changing its capital structure as shown in the below table:

1. Which of the following statements is INCORRECT? *

6 points

a. The target beta levered is higher than the current one by 0.263.

b. The beta unlevered is lower than the new beta levered by 0.771.

c. The new cost of equity is 14.70%.

d. The old after-tax cost of debt is 5.6%

e. None of the above

2. What is the companys old WACC? *

4 points

a. 10.61%

b. 11.02%

c. 9.69%

d. 12.36%

e. None of the above

3. By how much would the WACC change if it moves to the new capital structure? *

5 points

a. It would increase by 0.41%

b. It would decrease by 0.22%

c. It would increase by 0.69%.

d. It would decrease by 1.97%

e. None of the above