1. Leveraged Recapitalization at Home Depot Below is an abbreviated balance sheet for Home Depot (numbers in $millions). They currently have 1,507 million shares outstanding at a price of $60 per share. Total Assets LIABILITIES AND STOCKHOLDERS' EQUITY Total debt Other Liabilities Total Liabilities Total Stockholders' Equity $ 40,518 10,788 11,832 22,620 17,898 Total Liabilities and Stockholders' Equity $ 40,518 Management is considering issuing an additional $7 billion in debt and using the proceeds to repurchase shares in the open market. Answer the questions below using the following assumptions: The new debt will be kept outstanding at a fixed level perpetually. Home Depot's effective corporate tax rate in recent years is 36% 2) Complete the market value balance sheet below, both before (currently) and after the whole transaction (including debt issuance and share repurchase) is completed. Assume the market is not currently aware of the planned recapitalization. Before: Assets: D: E: Assets: After: D: E::