Astromet is financed entirely by common stock and has a beta of 1.0. The firmpays no taxes. The stock has a price-earnings multiple of 10 and is priced to offera 10% expected return. The company decides to repurchase half the commonstock and substitute an equal value of debt. Assume that the debt yields arisk-free 5%. Calculate the following

a. The beta of the common stock after the refinancing

b. The required return and risk premium on the common stock before the refinancing

c. The required return and risk premium on the common stock after the refinancing

d. The required return on the debt

e. The required return on the company (i.e., stock and debt combined) after the refinancing