Vides Excel Online Structured Activity: Hamada equation Situational Software Co. (SSC) is trying to establish its optimal capital structure. The current capital structure consists of 20% debt and 80% equity; however, the CEO believes that the firm should use more debt. The risk-free rets, Far, is 4%; the market risk premium, Pes 7%; and the firm's tax rate is 40%. Currently, SSC's cost of equity & 10% which is determined by the CAPM. The data has been collected in the Microsoft Excel Online la below. Open the spreadsheet and perform the required analysis to answer the Question below X Open spreadsheet What would be SSC's estimated cost equity of changed its capital structure to som de and 50% aty? Round your answer to two decimal places. Do not round Intermediate seps Check My Won Excel Online Structured Activity: Recapitalization Currently, Forever Flowers Inc. has a capital structure consisting of 35% debt and 65% equty, Forever's debt currently has an 8% yield to maturity. The risk-free rate (ar) 48, and the market risk premium (PR) is 5%. Using the CAPM, Forever estimates that its cost of equity is currently 12%. The company has 40% tax rate. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the recruired analysis to answer the questions below. Do not round Intermediate calculations. Open spreadsheet a. What is Forever's current WACC Round your answer to two decimal places. h. What is the current beta on Forever's common stock? Round your answer to two decimal places. What would Forever's buto be if the company had no debt in its capital structure (That is, what is Forever's unlevered beta, bus Round your answer to two decimal places Forever's financial staff is considering changing its capital structure to 40% debt and 60% equity. If the company went ahead with the proposed change, the vield to maturity on the company's bonds would rise to 9.8%. The proposed change will have no effect on the company's tax rate. 4. What would but the company's new cost et equity if it adopted the proposed change in capital structure? Round your answer to two decimal places What would be the company's new WACC in it adopted the proposed change in capital structure? Round your answer to two decimat places t. Based on your answer to part would you advise forever to adopt the proposed change in capital structure? 3 Walsh Compara confidering the Independent projects, each of which requires a million Investment. The strated internal rate of return (k) and cost of capital for these projects are presented below: Project H (High risk): Cost of capital -10% IRR - 18 Project M (Medium risk): Cost of capital 14 IRR - 12% Project L (Low risk): Cost of capital - 74 IRR - 114 Note that the projects' costs of capital vary because the projects have different levels of risk. The company's optimal capital structure calls for 30dutt and 70% common cauty and expects to have net income of $10,046,500. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analys to answer the question below. Open spreadsheet If Walsh establishes its dividends from the residual dividend model, what will be it payout ratio? Round your answer to two decimal places. Check My Work Reset