ABC Inc, an all-equity company is considering issuing debt and using the proceeds to repuchase equity. Here is some relevant data: - The company has 200,000 shares outstanding, trading at $25 per share - The debt, when issued will have a YTM of 2.1% - The beta of the stock is currently 1 . The MRP is 5.5% and the risk free rate is 0.8% - The company plans to issue $1,500,000 in debt. - The current tax rate is 15%. Ignore personal taxes and costs associated with financial distress - Assume the EMH a. Calculate the current Market Capitalization of ABC Inc: b. What is the price per share immediately after the announcement of the debt issue? c. How many shares will be repurchased as a result of this transaction? d. What will be the Market Capitalization of ABC Inc after the transaction is complete? e. What is the expected return on equity before the announcement of the debt issue? f. What is the expected return on equity after the announcement of the debt issue? ABC Inc, an all-equity company is considering issuing debt and using the proceeds to repuchase equity. Here is some relevant data: - The company has 200,000 shares outstanding, trading at $25 per share - The debt, when issued will have a YTM of 2.1% - The beta of the stock is currently 1 . The MRP is 5.5% and the risk free rate is 0.8% - The company plans to issue $1,500,000 in debt. - The current tax rate is 15%. Ignore personal taxes and costs associated with financial distress - Assume the EMH a. Calculate the current Market Capitalization of ABC Inc: b. What is the price per share immediately after the announcement of the debt issue? c. How many shares will be repurchased as a result of this transaction? d. What will be the Market Capitalization of ABC Inc after the transaction is complete? e. What is the expected return on equity before the announcement of the debt issue? f. What is the expected return on equity after the announcement of the debt issue