Motive Ltd. currently has $6 million worth of debt outstanding. The cost of debt is 8 percent per year. David MUI plans to announce that Motive issues debt securities and use the proceeds to repurchase common stock. As a result, the firm's debt-equity ratio is expected to rise from 35 percent to 50 percent. Motive expects to have an EBIT of $2.31 million per year in perpetuity. Its main competitor is Vable Ltd. Motive Ltd. and Vable Ltd. are identical in every respect except that Vable is not levered. Assume perfect capital market in answering the questions. A) How much is the market value of Motive Ltd. before and after the repurchase announcement? (6 marks) B) Before the announcement of the stock repurchase plan, what is the expected return on the firm's equity? (4 marks) C) What is the expected return on the equity of Vable Ltd.? (5 marks) D) What is the expected return on Motive's equity after the announcement of the stock repurchase plan? (5 marks) Motive Ltd. currently has $6 million worth of debt outstanding. The cost of debt is 8 percent per year. David MUI plans to announce that Motive issues debt securities and use the proceeds to repurchase common stock. As a result, the firm's debt-equity ratio is expected to rise from 35 percent to 50 percent. Motive expects to have an EBIT of $2.31 million per year in perpetuity. Its main competitor is Vable Ltd. Motive Ltd. and Vable Ltd. are identical in every respect except that Vable is not levered. Assume perfect capital market in answering the questions. A) How much is the market value of Motive Ltd. before and after the repurchase announcement? (6 marks) B) Before the announcement of the stock repurchase plan, what is the expected return on the firm's equity? (4 marks) C) What is the expected return on the equity of Vable Ltd.? (5 marks) D) What is the expected return on Motive's equity after the announcement of the stock repurchase plan