Green Manufacturing, Inc., plans to announce that it will issue $1.4 million of perpetual debt and use the proceeds to repurchase common stock. The bond will sell at par with a 6 percent annual coupon rate. Green is currently an all-equity rm worth $7.3 million with 260,000 shares of common stock outstanding. After the sale of the bonds, Green will maintain the new capital structure indenitely. Green currently generates annual pre-tax earnings of $1.73 million. This level of earnings is expected to remain constant in perpetuity. Green is subject to a corporate tax rate of 40 percent. (a) What is the expected return on Green's equity before the announcement of the debt issue and What is the price per share of the rm's equity? (b) What is Green's stock price immediately after the announcement of the debt issue to repurchase stock? (c) How many shares will Green repurchase as a result of the debt issue and how many common shares Will remain after the repurchase? (d) What is the required return on Green's equity after the restructuring