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Foodco Company has reported the following financial data on its recent financial report. The company...

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Foodco Company has reported the following financial data on its recent financial report. The company is planning to restructure its capital structure by increasing its debt from 30% to 40% of the total capital of the company. The proposed capital structure is composed of 40% debt and 60% equity. The company is planning to issue a 1000 face-value, 15-year bond outstanding with a 7% annual coupon rate that is currently trading at its par value. The new debt issue will increase the before tax cost of debt to 8%. The company applies a marginal tax rate of 30%. In addition, the report shows that the risk free rate is 5%, the market risk premium is 6% and its common stock has a beta of 1.4. Required? (a) Compute the weighted average cost of capital of the company? (b) Suppose that the weighted average cost of capital for the company was 9.5%. Discuss whether the company should proceed with the restructuring of its capital structure? (c) The company is planning to use the new debt to finance a new capital project with an IRR of 10%. Discuss whether the company should proceed with the new project

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