Question: Compute a graph . Use a spreadsheet. Your firm will be worth either $50,000 or $100,000 with equal probabilities. The cost of capital on your

Compute a graph . Use a spreadsheet. Your firm will be worth either $50,000 or $100,000 with equal probabilities. The cost of capital on your debt is given by the for E rDebt = 5% + 10% ?Debtbut only if the debt s risky. (Hint: The risk-free rate of return is 11.85%. What is the WACC of the firm if it is 100% debt-financed?

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