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Chandeliers has no debt but it can borrow at 6.1%.   The firm has a WACC of...

Chandeliers has no debt but it can borrow at 6.1%.   The firm has a WACC of 9.5% and tax rate is 35%.

  1. What’s the firm’s cost of equity?
  2. If the firm converts to 25% debt, what the equity cost will be?
  3. If the firm converts to 50% debt, what the equity cost will be?
  4. What’s the firm’s WACC at 25% debt?
  5. What’s the firm’s WACC at 50% debt?
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