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An all-equity firm has a cost of equity of 8.75% and expects its EBIT will be $450,000 every year forever. The firm is considering borrowing

An all-equity firm has a cost of equity of 8.75% and expects its EBIT will be $450,000 every year forever. The firm is considering borrowing $150,0000 and using the proceeds to repurchase shares. Assume all the Modigliani and Miller (M&M) assumptions are satisfied. According to M&M Proposition I without taxes, what would the firm's WACC be after the capital restructuring?

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