Modigliani \& Miller Propositions You operate an all-equity financed company in perfect markets and generate earnings before interest and tax of $550,000. Your firm has just sold \$2.1 million worth of 5.5\% coupon rate bonds and plans to use the proceeds to buy back outstanding shares of stock. Your firm's industry requires a 10.50% ROA. . Calculate the market price and required return for your firm's stock just prior to the repurchase. o. Calculate the market price and required return for your firm's stock just after the repurchase? a. The market price of your firm's stock just prior to the repurchase is $ (Round to the nearest dollar.) The required return on your firm's stock just prior to the repurchase is \%. (Round to two decimal places.) b. The market price of your firm's stock just after the repurchase is $ (Round to the nearest dollar.) The required return on your firm's stock just after the repurchase is \%. (Round to two decimal places.) Agency Costs and Capital Structure Galaxy Enterprises has earnings before interest and taxes of $10,000,000 and $100,000,000 of debt outstanding with a required rate of return of 7.5%. The required rate of retum on assets in the industry is 12%. The corporate tax rate is 20%, but there are no personal taxes. The present value of Galaxy's bankruptcy costs is $20,000,000. Compute Galaxy's firm value. The present value of Galaxy's debt tax shields is $ (Round to the nearest dollar.) If Galaxy has no debt, the value of the firm is \$ (Round to the nearest dollar.) Since Galaxy currently has $100,000,000 of debt outstanding, the value of the firm is ? : (Round to the nearest dollar.)