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. 5. 6. 7. eBook Optimal Capital Structure with Hamada Beckman Engineering and Associates (BEA) is considering a change in its capital structure. BEA currently has $20 million in debt carrying a rate of 6%, and its stock price is $40 per share with 2 million shares outstanding, BEA is a zero growth firm and pays out all of its earnings as dividends. The firm's eert is $13,393 million, and it faces a 30% federal-plus-state tax rate. The market risk premium is 6%, and the risk free rate is 6%, BEA is considering increasing its debt level to a capital structure with 35% debt, based on market values, and repurchasing shares with the extra money that it borrows. BEA will have to retire the old debt in order to issue new dubt, and the rate on the new debt will be 11% BEA has a beta of 0.9. 2. What is Ben's untevered beta? Use market value D/s (which is the same as waw.) when unlevering. Do not round intermediate calculations Round your answer to two decimal places b. What are as new bute and cost of equity if it has a debt? Do not round Intermediate calculations. Round your answers to two decimal places Beta Cost of equity What are BAY WACC and total value of the firm with 35 debt? Do not round Intermediate calculations. Round your answer to two decimal places What is the total value of the firm with a debt Enter your answers in million. For example answer of $10,550,000 should be entered 10.55. Do not found intermediate calculation. Round your answer to the decimal places

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