Honeybest International Inc. (HOB) has a market debt-equity ratio of 0.5. Assume its current debt cost...

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Honeybest International Inc. (HOB) has a market debt-equity ratio of 0.5. Assume its current debt cost of capital is 6.5%, and its equity cost of capital is 14%. If HOB issues equity and uses the proceeds to repay its debt and reduce its debt-equity ratio to 0.3, it will lower its debt cost of capital to 5.75%. With perfect capital markets, what effect will this transaction have on HOB's equity cost of capital and WACC? (To receive full credit, show the calculations below) Honeybest International Inc. (HOB) has a market debt-equity ratio of 0.5. Assume its current debt cost of capital is 6.5%, and its equity cost of capital is 14%. If HOB issues equity and uses the proceeds to repay its debt and reduce its debt-equity ratio to 0.3, it will lower its debt cost of capital to 5.75%. With perfect capital markets, what effect will this transaction have on HOB's equity cost of capital and WACC? (To receive full credit, show the calculations below)