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Buggins Incorporated is financed equally by debt and equity, each with a market value of $ 2 . 3 million. The cost of debt is

Buggins Incorporated is financed equally by debt and equity, each with a market value of $2.3 million. The cost of debt is 6.3%, and the cost of equity is 11.3%. Assume that the initial market value of equity is based on a perpetuity model with full dividend payout (no growth). The company now makes a further $575,000 issue of debt and uses the proceeds to repurchase equity. The cost of debt is rising now to 6.8% and the cost of equity to 18.63%. Assume the firm pays no taxes.
How much debt does the company now have? Note: Enter your Answer in Dollars.
How much equity does it now have? Note: Enter your Answer in Dollars.
What is the overall cost of capital?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.
What is the percentage increase in earnings per share after the refinancing?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
What is the new price-earnings multiple?
Note: Round your answers to 2 decimal place.

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