Buggins Incorporated is financed equally by debt and equity, each with a market value of $2.6 million. The cost of debt is 6.6%, and the cost of equity is 11.6%. 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 $650,000 issue of debt and uses the proceeds to repurchase equity. The cost of debt is rising now to 7.1% and the cost of equity to 20.43%. Assume the firm pays no taxes.

1. How much debt does the company now have? Note: Enter your Answer in Dollars.
2. 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.