-10.39 courses/2353/assignments/49695?moduleItem jd-116220 Question 18 View Policies Current Attempt in Progress Oriole Inc. produces annual cash flows of $185,000, which are expected to continue indefinitely. The company is financed entirely with equity capital at an annual cost of 10 percent. Management is considering borrowing $420,000 at an annual interest rate of 7 percent to repurchase $420,000 of the company's outstanding stock (You can assume that the debt will be outstanding into the indefinite future.). (a) What is the total value of Oriole' stock before the stock repurchase? Total value of Oriole' stock before the stock repurchase $ (b) Under the assumptions in Modigliani and Miller's Proposition 1, what would be the value of the total claims on the company's assets after the stock repurchase? Value of the total claims on the company's assets after the stock repurchase $ (c) What will be the rate of return on common stock required by Investors after the repurchase? (Round answer to 2 decimal places. e. 5.75%) Rate of return on common stock required by Investors after the repurchase -10.39 courses/2353/assignments/49695?moduleItem jd-116220 Question 18 View Policies Current Attempt in Progress Oriole Inc. produces annual cash flows of $185,000, which are expected to continue indefinitely. The company is financed entirely with equity capital at an annual cost of 10 percent. Management is considering borrowing $420,000 at an annual interest rate of 7 percent to repurchase $420,000 of the company's outstanding stock (You can assume that the debt will be outstanding into the indefinite future.). (a) What is the total value of Oriole' stock before the stock repurchase? Total value of Oriole' stock before the stock repurchase $ (b) Under the assumptions in Modigliani and Miller's Proposition 1, what would be the value of the total claims on the company's assets after the stock repurchase? Value of the total claims on the company's assets after the stock repurchase $ (c) What will be the rate of return on common stock required by Investors after the repurchase? (Round answer to 2 decimal places. e. 5.75%) Rate of return on common stock required by Investors after the repurchase