Problem $15-10$

Optimal Capital Structure with Hamada

will be $8\%.$ BEA has a beta of $1\mathrm{.}0.$

a$.$ What is BEA's unlevered beta? Use market value D$/$S $($which is the same as $\frac{w_d}{w_S})$ when unlevering. Round your answer to two decimal places.

b$.$ What are BEA's new beta and cost of equity if it has $35\%$ debt? Do not round intermediate calculations. Round your answers to two decimal places.

Beta

Cost of equity

$\%$

c$.$ What are BEA's WACC and total value of the firm with $35\%$ debt? Do not round intermediate calculations. Round your answer to two decimal places.

$\%$

entered as $1\mathrm{.}2,$ not $1,200,000.$ Round your answer to three decimal places.

$

million