Problem 4) (25 points) XOM is considering a change in its capital structure. XOM will increase its debt level to a capital structure with 50% debt and repurchase shares with the extra money that it borrows. XOM will retire old debt to issue new debt, and the rate on the new debt will be 11%. XOM currently has $40M in debt carrying a rate of 9%, and its stock price is $30 per share with 4 million shares outstanding. XOM is a zero-growth firm and pays all its earnings as dividends. The firm's EBIT is $40 million, and its tax rate is 35%. The market return is 13% and risk-free rate is 4%. XOM has a beta of 1.6. a) What is the XOM's unlevered beta? In all beta levering and un-levering steps apply Hamada Equation. b) What are XOM's new beta and cost of equity if it has 50% debt? c) What are XOM's WACC and total firm value with 50% of debt? d) What is the premium for financial risk attached to Nevada Inc.'s equity, given its leverage ratio is 50%? You can use your results from parts (a) and (b) to answer part (d)