1. Compute the company?s earnings per share, stock price, and market value before and after the debt issue and stock repurchase

. (2) Revcorp is planning to repurchase shares of common stock with the proceeds of a $800 million debt issue. The interest rate on the debt is expected to be 12%. Currently Revcorp is unleveled with 100,000,000 common shares out standing and has pretax operating income of $800 million. The equity has a required rate of return of 20% based on an equity beta of 1.77. Assume the company's tax rate is 40%, there are no personal taxes, and all cash flows are level perpetuities. . (a): Compute the company's earnings per share, stock price, and market value before the debt issue and stock repurchase . (b): Compute the company's earnings per share, stock price, and market value after the debt issue and stock repurchase