Hong has a debt/equity ratio of 2/3. It has 1,000,000 shares outstanding trading at $30 each. Its debt is perpetual with a coupon rate of 6% and is trading at par. Hong expects to have EBIT of $6,000,000 per year in perpetuity. Hong is planning to payoff $10,000,000 of its debt. It will issue enough common shares and will use the cash proceeds to pay off the debt. After the repurchase of debt, it will maintain the new capital structure indefinitely. Hong's corporate tax rate is 40% 1. What is Hong's current value, cost of equity and the rwacc? 2. What is the Hong's value after the announcement of the debt repurchase? 3. How many shares of stock will Hong issue? 4. After the capital restructuring has taken place, what will be Hong's 1) Total equity 2) Number of shares outstanding 3) Price per share 4) Cost of equity 5) rwacc