Cedar inc. is an all equity firm with assets worrh 25 billion and 10 billon shares outstanding. Cedar plans to borrow 5 billion and use funds to repurchase shares. Cedar's corporate tax rate is 25% and Cedar olans to keep its outstanding debt equal to 5 billion permanently.

a. without the increase in leverage, what would rallys share price be?

b. Suppose Cedar offers $2.53 per share to repurchase its shares. Would shareholders sell for this price?

c. Suppose Cedar offers $2.78 per share, and the shareholders tender their shares at this price. What will Cedar's share price after the repurchase?

d. What is the lowest price Cedar can offer and have shareholders tender their shares? What will be its stock price after the share repurchase in that case?