(15 marks) Valid Inc. is planning to change its capital structure. It currently has 80 million shares outstanding, selling at $10 per share and with equity beta of 1.15. The market value of debt outstanding is $200 million with a market interest rate of 10%. The current risk-free rate is 3%, the equity market risk premium is 5%, and marginal tax rate is 40%. As Valid Inc currently has zero cash holdings, the CEO is worried that they will have liquidity issues in times of economic crisis. Therefore, he is proposing to borrow an additional $200 million in debt and keeping all the proceeds as cash which earns zero interest. If the firm does so, the market interest rate on its debt will increase to 11%. If Valid Inc makes this move, what will the new stock price be (assuming zero growth in perpetuity)