Question: ||_ Capital structure a leverage (Session teeth.) {Submission in Excel only} Currently, GarneStep Ltd has a capital structure consisting of 10% debt and Ell-lit. equity.

||_ Capital structure a leverage (Session teeth.)
||_ Capital structure a leverage (Session teeth.) {Submission in Excel only} Currently, GarneStep Ltd has a capital structure consisting of 10% debt and Ell-"lit. equity. Game Stop's debt currently has an E33 yield to matun't'y. The risk-free rate is 5% and the return on market is 121.. Us'ng the CAPM, Game Shop's estimates that its cost of equity is 15.5%. The company has a tax rate of 35%. You need to compute the t'olowing: a. The WADE of Game Step. \"Fl ti. The current Eteta of Game Stop. it\" c. 1ir'viihat woutd be the Beta at Game Stop- it there was he debt in the capital structure? W Game Stan's management is evaluating the option of increasing the debt component to 2550'. and equity component to T555. If the company went ahead with the plan, the yield to maturity of the dehtwould he 1t].5t}\"te. The tax rate will remain unchanged. d. H the company goes ahead with the plan what would be the new cost of equity and the new WAC-C as per the new capital sanctum.\" e. Based on yciur answer to part d aloeue, would you advise Game Skip to go ahead with the change in the capital structure? Discuss. [hi

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