Question: Before the credit downgrade, MonashTech creditors require a 8% return while it's equity holders need a 3% premium on what creditors earn. The balance

Before the credit downgrade, MonashTech creditors require a 8% return while it's equity holders need a 3% premium on what creditors earn. The balance sheet of MonashTech is as follows: Assets Total MonashTech Balance Sheet $888 Debt Equity $888 Total $300 $588 $888 The required rate of return to be used in MonashTech capital budgeting is After the credit downgrade, creditors need a 1% premium on the original Kd. The new WACC of MonashTech is

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