Ephemeris Manufacturing is currently an all-equity company. Its annual after-tax cash flows are currently $0.9 million a year, and will remain constant for the future. The value of the equity is $10 million and there are 500,000 shares outstanding. Although the market doesn't know it yet, Ephemeris plans to announce that it will issue $2 million worth of perpetual bonds, in order to repurchase stock. The bonds will have a 6% interest rate. These bonds will be riskless. After the sale of the bonds, Ephemeris will maintain the new debt-to-value ratio forever. There are no personal taxes, and the corporate tax rate is 40%. There are no costs of financial distress. The risk-free rate is 6% and the market risk premium is 8.4%. (a) What is the cost of assets for Ephemeris, prior to the announcement? (b) What will happen to the stock price of Ephemeris when the plan is announced, but before the debt is issued? (c) How many shares will Ephemeris repurchase? (d) What will be the equity beta of Ephemeris after the repurchase