pennyless

A simple Balance Sheet table could be helpful for this kind of questions. Or a formula like:

Without Pension: OA*beta(OA) = E*beta(E)

Case I: beta(E) constant, if adding pension asset/liability, WACC=?

1) OA*beta1(OA) + PA*beta(PA) = E*beta(E)
2) beta1(OA) < beta(OA)
==> WACC1 is lower than the original WACC.

Case II: beta1(OA) and beta(E) constant, if beta(PA) increasing, D/E=?

1) OA*beta1(OA) + PA*beta(PA) = E*beta(E)
2) If beta(OA) increses, total asset beta increases, equity capial(E) increase,
==> D/E decreases. (D+E=OA)