Q4 Consider a firm with a capital structure given below. Assume the CAPM holds and that we are in a Miller-Modigliani world with corporate taxes. D 20 million betaD 0.1 P 40 price per share of equity n million # of shares outstanding betaE 1.2 T 20% rf 2% rM-rf 5% a At this capital structure: i What is the firm's before-tax cost of debt? rD 1 point ii What is the firm's cost of equity? rE 1 point ii What is the firm's after-tax WACC? WACC 2 points iv What is the firm's required return on assets? rA 2 points b The firm decides to recapitalize to a new capital structure with less debt and less risky debt given below. WD 10% percentage of debt in new capital structure betaD 0.0 i What is the firm's new before-tax cost of debt? rD |1 point ii What is the firm's new cost of equity? rE 2 points ii What is the firm's new after-tax WACC? WACC 2 points Q5 This year, your firm generated Sales of 100, Costs of goods sold of 40, and Depreciation of 10. You also spent 15 in Capital Expenditures and had an increase in Net Working Capital of 3. Corporate Tax Rate is 20%. What is your Free Cash Flow for the year? 5 points Q6 You own debt with a face amount of $150 million that you lent to a firm managed by its sole shareholder, whose firm is expected to generate next year either a cash flow of $200 million or $