1. What are the primary business risks and strengths associated with UST Inc.? Evaluate from the viewpoint of a bondholder. 2. Should UST Inc. undertake the $1 billion leveraged recapitalization? To answer this question, calculate the value of the company before and after the leveraged recapitalization. In addition, calculate and discuss the effect of the recapitalization on its stock price, market equity and debt to market equity ratio. Finally, discuss the impact that this transaction can have on the expected cost of financial distress of UST Inc. Assume 38% tax rate. Assume the $1 billion in new debt is constant and perpetual.