Green Manufacturing is an all equity firm with a current market value of $20,000,000 and 500,000 shares outstanding.The current expected return on the firm's stock is 20%.Green plans to announce that it will issue $2,000,000 of perpetual bonds and use these funds to repurchase equity.The bonds will have a 6% interest rate.After the sale of the bonds and the share repurchase, Green will maintain the new capital structure indefinitely.The corporate tax rate for Green is 30% and there are no personal taxes.

a) What was Green's weighted average cost of capital before the change in capital structure?

b) What is Green's weighted average cost of capital after the change in capital structure?