Irish Produce is now considering a leveraged recapitalization of the company. Upon announcement, management expects the share price to rise by 10%. If the company raises 2,000 million in new debt to repurchase shares, how many shares can the company repurchase? Assuming management will actively manage to the new capital structure, estimate its new market beta. If the interest rate on the company's debt rises to 100 basis points above the Irish risk- free rate, what will its new cost of capital equal? (Assume a debt beta of zero and that the beta of the tax shields will equal the beta of the unlevered firm. In other words, D = 0, and Tax shield = u.) (20 marks) E WACC = k(1-T)+k V E[R]=R,+B,(E[R] -R,) D b = b + (b - b) E