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Shadow Corp

#### Shadow Corp

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Shadow Corp. has no debt but can borrow at 6.6 percent. The firm's WACC is currently 8.4 percent, and the tax rate is 35 percent.

**a). **What is the firm's cost of equity? **(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)**

**b). **If the firm converts to 25 percent debt, what will its cost of equity be? **(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)**

**c). **If the firm converts to 40 percent debt, what will its cost of equity be? **(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)**

**d-1). **If the firm converts to 25 percent debt, what will the company's WACC be? **(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)**

**d-2). **If the firm converts to 40 percent debt, what will the company's WACC be? **(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)**