also. what is the new price earnings multiple && has anythinf happend to the stock price yes or no?
saved Astromet is financed entirely by common stock and has a beta of 1.40. The firm pays no taxes. The stock has a price earnings multiple of 13.0 and is priced to offer an expected return of 10.7%. The company decides to repurchase half the common stock and substitute an equal value of debt. Assume that the debt yields a risk-free 5.0%. Calculate the following: a. The beta of the common stock after the refinancing (Round your answer to 1 decimal place.) Beta of the common stock b. 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 a percent rounded to 1 decimal place.) % Required return 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 estock and debt combined) after the refinancing (Do not round Intermediate calculations. Enter your wiswer as a percent rounded to 1 decimal place.) Required WEBIT remains constant 1. What is the percentage increase in eamings per share after the refinancing (Do not round Intermediate calculations. Enter your answer as a whole percent) Increase in earnings per share saved Astromet is financed entirely by common stock and has a beta of 1.40. The firm pays no taxes. The stock has a price earnings multiple of 13.0 and is priced to offer an expected return of 10.7%. The company decides to repurchase half the common stock and substitute an equal value of debt. Assume that the debt yields a risk-free 5.0%. Calculate the following: a. The beta of the common stock after the refinancing (Round your answer to 1 decimal place.) Beta of the common stock b. 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 a percent rounded to 1 decimal place.) % Required return 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 estock and debt combined) after the refinancing (Do not round Intermediate calculations. Enter your wiswer as a percent rounded to 1 decimal place.) Required WEBIT remains constant 1. What is the percentage increase in eamings per share after the refinancing (Do not round Intermediate calculations. Enter your answer as a whole percent) Increase in earnings per share
