Hamon Erceres currently an aliquity firm with an expected return of 12%. It is considering a leveraged recaption in which would borrow and repurchase existing shares (Aasume perfect capital markets.) a. Suppose Harmon borrows is the point that its debeat is 0.50. With this amount of det the debt cost of capitalis 6. What will the spected retumor equity be after this transaction? t. Supported Homon borrows to the point that its by rahois 1.50w this amount of debt, Hardon't det i be much risker As a result, the debt cost of capital wil be. What will the expected return of equy be in this case C. A senior manager argues that is in the best rest of the shareholders to choose the capital structure that ads to the highest expected rolum for the stock How would you respond to this argument? a. Su Harmon borrows to the point that is de equity ratio is 0.50. With is out of debt, the debt cost of all of what will the expected retumofecuty beate this ransaction? Harmon bors to the point that is doblequity ratio is 0.50 and the debt cost of the expected retums. Round tone domace