(a-d)

Astromet is financed entirely by common stock and has a beta of 130. The firm pays no taxes. The stock has a price-carnings multiple of 2.0 and prices to offer an expected return of 1149. The company decides to repurchase half the common stock and substitute an equal value of debt. Assume that the debt yleles are free 4.856. Calculate the following .. The bets of the common stock after the refinancing (Round your answer to 1 decimal place. Bota of the common stock 5. The required return and risk premium on the common stock before the refinancing (Enter your answer as a percent rounded to 1 decimal place.) Required return Risk premium c. The required return and risk premium on the common stock after the refinancing (Enter your answer as percent rounded to 1 decimal place.) Required retum Risk premium d. The required return on the debt (Enter your answer as a whole percent) Required return e. The required return on the company le., stock and debt combinech after the refinancing (Do not round Intermediate calculations Enter your answer as a percent rounded to 1 decimal place.) Required retum HEBIT remains constant: f. What is the percentage increase in esrings per sharester the refinancing (Do not round intermediate calculations. Enter your answer as a whole percent.) Inces in comings per share 9-1. What is the new price-camnings multiple? (Do not round Intermediate calculations. Round your answer to 2 decimal places) Now price-caming multiple 9-2. Hes anything happened to the stock price? O Yes O NO