Answer the next 3 questions based on this information

Despite having a near-monopolistic market position, poor management and operational practices have left the Nautical Boating Network Corporation (NBN Co for short) significantly underfunded and needing to raise more capital. Because of its monopolistic position, debt holders are willing to lend NBN an additional $100 million, at a 1% premium to their current before-tax cost of debt of 4%. (This cost of debt of 5% will apply to all company debts after the debt raising). Even with its questionable management team, the additional debt is not expected to increase the risk of financial distress for NBN. The current market value of NBNs assets are $300 million and the current Debt to Equity ratio is 0.5. NBN has a current cost of equity of 8% and is subject to a 30% corporate tax rate.

What is NBNs current before-tax WACC?

6.67%

7.00%

6.00%

6.50%

If NBNs unlevered cost of equity is currently 7.2%, what will be the new cost of equity after the debt raising?

12.00%

10.25%

11.00%

9.40%

If NBNs cost of equity after the debt raising is 10%, what will be the after-tax WACC after the debt raising?

6.75%

5.81%

6.65%

6.17%

6.20%