Determining the cost of equity of shadow corp

Question

Problem:

Shadow Corp. has no debt but can borrow at 7.1 percent. The firm's WACC is currently 8.9 percent, and the tax rate is 35 percent.

Required:

Question 1: What is Shadow's cost of equity?

Question 2: If the firm converts to 25 percent debt, what will it cost of equity be?

Question 3: If the firm converts to 60 percent debt, what will it cost of equity be?

Question 4: If the firm converts to 25 percent debt, what will the company's WACC be?

Question 5: If the firm converts to 60 percent debt, what will the company's WACC be?

Note: Can someone please give me a step by step solution?