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iRemoteWorking is a startup launched by two ISEG's students during the Covid-19 pandemic aimed to provide a wide range of services for employees operating in remove mode

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iRemoteWorking is a startup launched by two ISEG's students during the Covid-19 pandemic aimed to provide a wide range of services for employees operating in remove mode. Initial capital was €48,000. The three friends are now looking to alternatives for financing the company and decided to hire your team for financial advisory. iRemoteWorking's survival depends on the ability to raise at least €80,000 during the next year. At the end of September 2020, the two partners presented a business plan to a large Portuguese bank. The business plan's viability depends on the proposed loan. The estimated free cash flows to the firm are as follows: (in EUR) 
t=0 Period 2020 Q4 2021 2022 2023 2024 2025 FCFF -12,750 6,150 73,800 81,180 93,300 98,000 
Cash flows are expected to persist from 2025 onwards. Overnight yields are at -0.35% and long-term bonds at 0.15%, both risk-free. Following the pandemic, analysts estimate an increase in market risk premiums to 6.75%. 
Similar companies have the following forward-looking data: 
Com•an Beta DIE Rd Tax Rate 
A 1.3 2.65 4.0% 28.0% B 2.5 4 5.6% 30.0% C 0.95 1.2 2.0% 25.0% D 1.6 2.8 4.2% 30.0% 
Corporate taxes dropped recently by 45 bps to 30.0%. Consider that Modigliani-Miller's framework with taxes is valid. 
5) Estimate the current equity cost of capital for iRemoteWorking. 
6) The bank agrees to lend €80,000 with maturity in 6 years and spread of 3.5%, although it imposed two covenants: i) no dividend distribution before full repayment; ii) Net Debt ÷ EBITDA less than 2x from 2022 onwards. 
What is iRemoteWorking weighted average cost of capital if this option is accepted? 
7) Recently, the Government of a developed country launched a stimulus package: - reduction in the top personal tax rate for equity income by 800 bps to 20.0%; - reduction in tax rates for interest income from 28.0% to 22.0%; - exempt of 25.0% of taxable income for corporate taxes. 
Compute the change in the relative tax advantage of debt.