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Question 8 1 pts Assume that we are in the MM world. Health and Wealth...

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Question 8 1 pts Assume that we are in the MM world. Health and Wealth Company is financed entirely by common stock that is priced to offer a 12 percent expected return. If the company repurchases 20 percent of the common stock and substitutes an equal value of debt yielding 8 percent, what is the expected return on the common stock after refinancing? 0 21 percent 13 percent 15 percent O 18 percent Question 9 1 pts Assume that we are in the MM world. The beta of an all-equity firm is 1.4. Suppose the firm changes its capital structure to 40 percent debt and 60 percent equity. What is the equity beta of the levered form? The beta of debt is 0.8. 22 O 1.2 O 1.8 O 24

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