Use the following to answer the first FIVE questions: A firm has $2,100,000 in EBIT. The firm has no debt, a share price of $12.00 per share of stock, a tax rateof 30%, and a cost of debt of 5%. The firm is considering issuing $3,000,000 in debt and using the proceeds to repurchase shares of common stock. The firm's beta is currently 1.2. There are 1,000,000 shares of stock outstanding. Compute each of the following after the restructuring is complete. This is an M&M world with corporate taxes.

1. Given the information above, the unlevered cost of equity is closest to

a) 12.25

B) 12.75

C) 13.25

D) 13.75

2.Given the information above, the total market value of the common stock after the change in capital structure is closest to

A) 8,900,000

B) 9,500,000

C) 9,900,000

D) 10,400,000

3.Given the information above, the beta of the common stock after the change in capital structure is closest to

A) 1.21

B) 1.37

C) 1.45

D) 1.88

4.Given the information above, the WACC after the change in capital structure is closest to

A)10.2

B)10.6

C) 11.1

D)11.45.

5.Given the information above, the price per share of the common stock after the change in capital structure is closest to

A)12.90

B)13.10

C)13.90

D)14.20