MM with Taxes Williamson, Inc. has a debt-equity ratio of 2.5. The firm's 8. What is the required return on Green's equity after the restructuring? d. What is the expected return on the firm's equity after the ann stock repurchase plan? 24. Stock Value and Leverage Green Manufacturing, Inc., plans to announce that it will issue $2 million of perpetual debt and use the proceeds to repurchase common stock. The bonds will sell at par with a coupon rate of 6 percent. Green is currently an all-equity firm worth $6.3 million with 400.000 shares of common stock outstanding. After the sale of the bonds, GO.n will maintain the new capital structure indefinitely. Green currently generates annual pretax earnings of S1.5 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? b. Construct Green's market value balance sheet before the announcement of the debt issue. What is the price per share of the firm's equity? c. Construct Green's market value balance sheet immediately after the announce- ment of the debt issue. d. What is Green's stock price per share immediately after the repurchase How many shares will Green repurchase as a result of the debt issue? How many shares of common stock will remain after the repurchase? 25. capital is 10 percent, and its relax announcement